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What is a VA Home Loan?

A VA loan is a loan for veterans, active duty service members, and their spouses.

What are the benefits of a VA Home Loan?

VA loans may offer you better terms than a traditional loan. The VA guarantees a portion, or all, of the loan. This means that a bank may offer you a lower interest rate than other mortgages.

VA Home Loan recipients aren’t generally required to provide a down payment. This allows you to finance 100% of the home’s value vs. a conventional loan which normally only finances 80% of the home’s value. Additionally, most other mortgage buyers are required to pay Private Mortgage Insurance, but VA buyers aren’t required to pay this additional insurance!

Who qualifies?

Veterans, active service members and their spouses. There are several qualifying factors of a VA Home Loan, such as:

  • Length of Service
  • Income
  • Type of property

All these factors are included on a VA Eligibility checklist, which we can provide you.

When can I apply for a VA Home Loan?

You can apply any time during, or after your service when you are looking to buy, or re-finance, your home (As long as the home is your primary residence).

How do I use a VA Home Loan?

You use your VA Home Loan for buying, or re-financing your home. You can even use your VA Home Loan more than once, for example: if you sell your home and buy another one. Once you’ve decided on the right house for you and applied for a VA loan, the VA requires an appraisal from a VA approved appraiser. This appraisal protects both the buyer and the bank by making sure the home is safe, structurally sound and a fair price.

What are some of the costs and fees with VA Home Loans?

There are two specific fees to getting a VA Home Loan, the funding fee and the appraisal fee. The appraisal fee covers the cost of a VA approved appraiser. You can find out the maximum allowable appraisal fee will be for your area at www.va.gov by searching on their website for “VA appraisal fees”.

The funding fee is a one-time fee on the loan and is charged as a percentage from 0-3.3% of the total amount of your loan. The full amount depends upon several factors including details of your military service and your down payment. The lower your down payment, the higher your funding fee will be. However, the funding fee can be bundled with the rest of your loan so that you don’t have to pay it up front. Just remember that this will accrue interest, as it is added to the loan. Veterans who are entitled to receive VA disability, or who have ten percent disability rating or higher, are exempt from paying a funding fee!

There is also a “funding fee” table to help you understand what you may need to pay at www.va.gov.

What can I do to save on my VA Home Loan?

One of the best ways to save money on your loan is to make as large of a down payment as you are able. This will mean that you’ll be paying less in interest. Paying your funding fee up front will also save you on interest over the life of your VA Home Loan.

Why might I not qualify for a VA Home Loan?

There are circumstances which may make applying for a VA Loan more difficult, and limits on how much you can borrow without a down payment. Low credit scores and debt wont necessarily prevent you from getting approved for a VA program, but it may stop you from getting approved by a specific bank. Having a higher credit score will give you a lower interest rate on your VA Home Loan.

Find out more about “VA loan limits” at www.va.gov.

Conclusion

VA loans are a great options for veterans and service members with better terms and rates than other mortgages. The VA can be a valuable source of support and assistance. If you would like, you can speak with one of our VA specialist agents to find out how you may apply or qualify for a VA Home Loan.

You can check the VA’s website (www.va.gov) to find out more information.