Why Prefer a VA Home Loan?

Have you served in the U.S. Army (or still are) and are looking into financing to move into your own home? Well, there is a good reason for you to be happy! You may benefit from the Veterans’ Affairs (VA) loan program. The program, since its launch in 1944, has helped more than 19 million veterans and their families enjoy living in their own homes. For about 70 years the program has been coming to the aid of veterans, even in the harshest of economic times. Let us talk exactly about what this loan program is!

The US Department of Veteran’s Affairs offers this loan option to military families, in order to help them enjoy home ownership through a home loan that involves no down payment and very less restrictions as compared to other mortgage loans. However, there are a few conditions for eligibility:

●     Applicants must be serving in the military currently, retired or a surviving spouse of either

●     No bankruptcy in the past two years from date of application

●     The credit reports should not reflect any loan default 12 months prior to the application date

US military veterans who meet the above criteria may be eligible for a VA loan. Get in touch with a VA home loan lender at the earliest! The next question that one may ask is, why go for this loan program? With home mortgages showing an upward trend, people either shy away from buying a house, or they keep looking for affordable solutions to owning a property. This program is definitely a silver lining for those eligible.  Whether you are seeking a loan for a new purchase, or hoping to refinance your existing mortgage, a VA home loan lender has a lot on the menu for you! Here’s why it is beneficial to be a part of this program:

●     Little or zero down- Applicants can do away with the hefty down payments that other loans require, helping them save almost 10-20% of the purchase cost. This is a big factor that attracts eligible borrowers as they can think about home ownership even if they do not have big savings.

●     No Private Mortgage Insurance (PMI) costs- This is another great feature of a VA loan. The borrowers do not have to bear the cost of PMI

●     Relaxed Refinancing options- As compared to regular borrowers, under this program, veterans pay much less to refinance their VA loan to a reduced rate.

●     Much lesser restrictions- The loans have gained a huge base of borrowers, as they involve much fewer restrictions.

The program is backed by a federal guarantee, and veterans who qualify for the program can get a loan to finance 100% of their property. To understand the program better and start the loan at the earliest, interested borrowers may go online and search for VA home loan lenders. By working with professional lenders, the whole process of understanding, applying for and closing a home mortgage loan can be simplified to a great extent.

VA Approved Lenders to Help Veterans become Homeowners

The Veterans Affairs (VA) loan is authorized by the U.S Department of Veterans’ Affairs. This loan program helps veterans who have served/presently serving the U.S. Military. It offers loans to purchase a new home through VA approved lenders. Even some of the surviving spouses of military personnel can qualify for such a loan.

Eligibility criteria for a VA loan

An applicant has to be a veteran who has a home loan entitlement. Conditions require a minimum number of active duty days for military personnel.

1.    Within a certain period of time after loan closure, the property has to be occupied by the owner.

2.     The applicant must have the reasonable credit to qualify for the loan process.

3.    The income of applying veterans and spouses should be adequate to cover all expense obligations.

Thus, the rules to qualify for the government backed loan process are quite straight forward.

A look at the benefits of VA home loans

1.    No down payment associated: Conventional loans usually require a down payment while those backed by the U.S. Department of Veteran Affairs finance up to 100% of the purchase price.

2.  No mortgage insurance: With traditional loans, when borrowers make a down payment of less than 20%, they have to bear the expenses of PMI; there’s no such insurance associated with VA loans.

3.   Guaranteed by the U.S. government: These loans come with a guarantee from the VA that a portion will be repaid to VA approved lenders if the applicants are unable to make monthly payments. This enables lenders to offer attractive terms to borrowers.

4.  Compare and make the best choice: These loans are offered by banks, credit unions, mortgage lenders and other institutions at different rates and fees. So, applicants can actually compare and make the best choice as per their budget.

5.  No prepayment penalty: These loans do not restrict you from selling your home or refinancing an existing loan into another, at any point of time.

6.   Wide variety of options: You can either opt for the loan process to buy a new home or to make repairs/improvements or to refinance an existing mortgage.

7. Easy to qualify: Compared to other loan processes, the ones backed by the Department of Veterans Affairs are more flexible and it is easier for applicants to qualify for the process.

8.  Lower closing costs: These loans limit the amount of closing costs charged by lenders.

9.  Funding fee flexibility: These loans associate a funding fee which is an upfront cost based on the loan amount, service type and other factors. Such fees can be financed with the loan itself, without any dues at the time of closing. These fees are usually not applicable for veterans receiving disability compensation or for eligible unmarried surviving spouses.

10. Assumable financing: These loans can be transferred to a future VA eligible home buyer.

Licensed VA approved lenders help veterans to understand the loan process matched with their requirements to let them avail the maximum benefits. They assist in obtaining a Certificate of Eligibility (COE) for the loan, calculate entitlements, select the right loan, apply for funding fee waivers (if applicable), explain fees and closing costs and other important decision making steps. Nowadays, such lenders are also available online to take care of the entire process. You can even check the present status of your application to stay updated about your VA home loans.