If you are considering buying a home, get the ball rolling by obtaining a pre-approval from a lending company. This will help you to know what you can afford, so you are able to look for houses within your budget. During this process, you will discover there are several different types of loans available, although you may not be aware of how they differ from each other. In general, different types of loans are set into place for those meeting specific qualifications. One such loan type is a VA home loan.
In order to qualify or VA home loan, you must be a veteran, service member, or a surviving spouse of someone who has served. As the name suggests, the Department of Veterans Affairs is the entity behind these loans, however, they work with private lenders to offer a mortgage loan that is backed by the government. These mortgages come with a variety of helpful benefits like no money down financing and lower rates than a typical loan.
VA home loans also come without the requirement for private mortgage insurance, which can save you a lot of money. Additionally, the VA limits the amount of closing costs that can be charged to veterans and service members. This means that you will have more money in your pocket when it comes time to close on your home.
The VA loan program is an excellent option for those who qualify, as it offers many benefits that you may not find with other loan types. If you are a veteran, service member, or surviving spouse of someone who has served, it is definitely worth looking into this type of loan. Read to learn more about the VA loan program and how it may be able to help you purchase your dream home.
How Do VA Mortgages Work?
As was aforementioned, VA home loans are a special type of loan that can only be obtained if you are currently serving or have served previously in the United States Armed Forces. Regardless of whether you served 30 years ago or are currently serving, you may apply for this benefit anytime you wish for the remainder of your life. If you qualify for this type of financing, the VA will guarantee as much as 100% of your financing.
The VA home loan offers much flexibility to qualified individuals, allowing them to refinance an existing mortgage, consolidate several outstanding debts into a single payment, or even purchase a brand-new home. VA home loans can also be used to build a new home, although this process is more complicated than purchasing a home that is already built. Ultimately, this benefit helps those who have served or are serving to get into quality housing more easily and affordably due to lower interest rates and the ability to put down less money or no money at all without penalty.
Are There Any Qualifications That Must Be Met Other Than Serving in The Armed Forces?
While VA loans are designed specifically for those who are serving or have served, there are still some qualifications that must be met in order to secure this type of financing. You will need to prove you qualify by presenting a Certificate of Eligibility that certifies that you have met the necessary service requirements to obtain a VA home loan. These specific requirements will be detailed below:
1.) You are eligible for a VA loan after you have served 90 days (consecutively) of active service during a time of war.
2.) If you have served 181 days of consecutive service during a time of peace, you will qualify for a VA home loan.
3.) If you are a spouse of an armed services member who gave their life for their country or who passed away as a direct result of a service-incurred injury/disability, you may qualify for a VA loan.
4.) If you are part of the National Guard or Reserves for a period of at least six years or a period of at least 90 days that included a minimum of 30 consecutive days of service while under Title 32 orders, you can obtain a VA home loan.
In addition to the above requirements, you must also meet certain credit and income qualifications in order to be approved for a VA home loan. You will also need to have a good credit score and a steady income that can cover your monthly mortgage payments. Furthermore, you may need to provide proof of assets, such as bank statements or other financial documents in order to prove that you are able to make your payments on time.
Benefits of Obtaining A VA Home Loan!
There are many benefits to obtaining a VA home loan, some of them include:
1.) No Money Down
The most notable benefit is that you can purchase a home with no money down and without having to pay private mortgage insurance (PMI). Thus, you won’t have to worry about paying an additional fee each month in order to insure your loan and you can enjoy the freedom of purchasing a home without saving for a down payment for years on end.
2.) Better Interest Rates
As was mentioned previously, the interest rates on VA home loans are typically lower than those of conventional loans, which can help make your monthly payment more affordable, allow you to get into a more expensive house with a lower monthly payment, and save you money in the long run.
3.) VA Loans Are Assumable
This simply means that if you decide to sell your home, the buyer can take over your loan and assume the remaining balance. This can be a great advantage for buyers who may not qualify for a traditional loan or who want to avoid having to pay closing costs associated with obtaining a new loan.
4.) More Assessable Than Conventional Loans
VA home loans are more accessible than conventional loans and can be used to purchase a home, build a home, or even make improvements to an existing home. This makes them a great option for those who may not qualify for other types of financing.
5.) No Prepayment Penalties
Finally, VA home loans do not have any prepayment penalties associated with them. This means that you can pay off your loan early without any additional fees or charges. This can be a great way to save money in the long run and help you pay off your loan faster.
In conclusion, VA home loans offer many advantages to those who qualify for them. If you are a veteran or active-duty service member, it is well-worth looking into this type of loan to see if it is right for you!