The VA Mortgage is designed to offer long-term financing to American veterans, VA Mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Veterans Administration. The VA determines eligibility and issues a certificate to qualifying applicants to submit to their mortgage lender of choice. It is generally easier to qualify for a VA loan than conventional loans.
Here are the basics of the program:
- 100% financing without private mortgage insurance or 20% second mortgage.
- A VA funding fee of 0 to 3.3% (this fee may be financed) of the loan amount is paid to the VA.
- When purchasing a home, veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less.
- When refinancing a home, veterans may borrow up to 90% of reasonable value in order to refinance where state law allows.
The Benefits of a VA Loan:
- A VA Loan offers a substantially lower your monthly payment. PMI, or private mortgage insurance is not required on a VA loan. PMI is an added monthly expense required for conventional loans where the borrower finances more than 80% of the home's value.
- 100% Financing on the home
- The qualification guidelines are less stringent for VA Loans. Because the loan is backed by the government, lenders have relaxed the often strict lending rules for VA Loan applicants making them easier to obtain.
VA Certificate of Eligibility Instructions - As a veteran you need a certificate of eligibility before applying for a VA loan. This link will put you right in the instructions screen on the web site.
US Department of Veterans Affairs Website