What You Need to Know About VA Loan

A VA loan is a government loan guaranteed by the Department of Veterans Affairs for qualified veterans, service members, and surviving spouses. Even if your credit isn't perfect, you can still qualify for a low-cost mortgage whether you want to buy a house or refinance. The VA offers specific guarantees to private lenders that handle VA loans. Because of these guarantees, lenders will issue loans to candidates with no down payment or less stringent requirements than other loans.

VA Loan Qualification

VA loans have easier credit requirements than many other mortgage programs. But not all people who have served in the Armed Forces are eligible for a VA loan. To qualify, you must meet one of the following: You've served 181 days of active service during peacetime and 90 consecutive days during wartime. You've served more than six years in the National Guard or Reserves or 90 days under Title 32 with at least 30 straight days; Your spouse died in the line of duty or from a service-connected disability.

Types of VA Loans

VA Purchase Loan allows Veterans to buy single-family homes, condos, manufactured, multiunit, and new construction homes with a $0 down payment. Policy and guidelines differ by lender, and some don't make VA purchase loans. 

VA Interest Rate Reduction Refinance Loan (VA IRRL) is one of two VA refinancing choices that most Veterans choose. It's straightforward and has low-cost refinance loans that don't always require credit underwriting, income verification, or appraisals. The VA IRRRL is only for Veterans with a VA loan, requires a lower new rate, and sets a deadline for when the costs and fees must be reimbursed. All of these ensure Veterans receive total financial benefits.

VA Cash-Out Refinance. Veterans with or without VA loans can apply. Since these loans don't require homeowners to take out cash, Veterans with non-VA mortgages can use this option as a basic rate-and-term refinance. In addition, Up to 90% of a home's value can typically be refinanced.

VA Loan Limits. Qualified veterans can borrow up to the maximum amount a lender is willing to lend without making a down payment. The VA loan limits only apply to buyers who don't have full entitlement because they have one or more active VA loans or lost a previous one to foreclosure.

VA Home Loan Benefits

Perks of a VA home loan include the following: no down payment required unless, in some cases or the asset's purchase price is more than the property's value offers; VA has competitively low-interest rates; it has limited closing costs, and you should expect to find closing costs 3% – 5% of the total value of the loan; On a VA loan, you don't have to pay Private Mortgage Insurance (PMI); because the entitlement usually covers more than 20% of the home's value; and The VA home loan is a lifetime benefit, you can use the guaranty multiple times.

Finding Your Lender

Loan preapproval is a vital step before making an offer on your dream home. To successfully apply for a VA loan or another sort of mortgage, you might seek assistance from an experienced real estate agent. Our highly skilled experts will help you with VA loans or guide you to the best home loans or mortgages. Contact us to learn about our services.