We owe our veterans a debt of gratitude that can never be repaid. Thankfully, VA home loans are available to qualifying U.S. veterans to help express our gratitude as a nation.
Here are the basics of what you need to know to get a VA home loan. We hope every qualifying veteran is able to take advantage of the VA home loan program. As a mortgage broker, we are thankful for every opportunity to serve our vets, and help them purchase or refinance a home.
What is a VA Home Loan?
The United States government offers a mortgage program both for veterans and those who are currently serving in the military. Although the money isn’t directly loaned by the VA, the VA backs loans made by private lenders to veterans, active duty military members, and spouses of military members.
If you qualify for a VA home loan, there are three different types to explore:
- Purchase loans.
- Interest rate reduction refinance loans.
- Cash-out refinance loans.
While there are different benefits for each type of VA mortgage, the biggest benefit of a VA home loan is that the borrower does not need to make a down payment.
Who Qualifies for a VA Home Loan?
While the government does its best to support all members of the military, you have to meet certain qualifications in order to be eligible for a VA home loan. The list for those who are eligible includes:
- Active-duty personnel.
- Reserve members.
- National Guard members.
- Some surviving spouses.
In addition to meeting one of these requirements, you must also have suitable credit, sufficient income, possess a valid Certificate of Eligibility, and be using the home for personal occupancy.
Benefits of Securing a VA Home Loan
Due to the impressive benefits of securing a VA home loan, we hope all eligible members of the military consider using the program.
Here is a list of benefits from Zillow to consider when thinking about a VA home loan:
- No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property).
- Negotiable and competitive interest rate.
- Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation).
- VA rules limit the amount you can be charged for closing costs.
- Closing costs are comparable with other financing types (and may be lower).
- Closing costs may be paid by the seller.
- No private mortgage insurance premiums are required.
- An assumable mortgage.
- Right to prepay your mortgage without penalty.
- For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
- VA assistance to veteran borrowers in default due to temporary financial difficulty.
How to Secure a VA Home Loan
The process for securing a VA home loan is straightforward, especially if you work with a reputable mortgage broker who will walk you through the entire process.
Here is a summary of the steps:
- Select a mortgage broker to help you.
- Review the requirements and secure your Certificate of Eligibility.
- Pre-qualify for your loan amount (not required but very helpful).
- Find a home and sign a purchase agreement.
- Apply for your VA home loan.
- Lender processes the home loan application.
The VA does not set a cap on how much a veteran can borrow, but there are limits on the amount of liability the VA will assume. Therefore, there is a maximum loan amount that a veteran can borrow without making a down payment.
For 2017, the lowest maximum loan amount for a VA home loan without a down payment is $424,100, but the cap is higher in some counties because of the cost of housing. To see the maximum loan amount in a given year for residents of specific U.S. counties, consult the VA website for loan limits.
Marimark Mortgage is based in Tampa, and serves the mortgage needs of homebuyers, homeowners, and investors in Florida, Virginia, and Pennsylvania.
We specialize in conventional home mortgages, FHA, VA and USDA mortgage options, refinance loans, and reverse mortgages. We’ve worked extensively with cash-out refinancing, and help clients with HARP refinancing to lower their monthly mortgage payments.