Veterans deserve a good life. Their amazing service to the country qualifies them for a good shot at living a reasonably seamless civilian life. And to effect this, the GI Bill of Rights set up the VA home loan program in 1944. The aim is to make it easier for veterans and their families to buy a home and transit without any hitch to everyday civilian life after World War II. Thus, if you are a veteran or home buyer, this article has been carefully curated to contain everything you need to know about VA home loans.
What is a VA Loan?
The US Department of Veterans Affairs backs this home loan. Now, although the US government is not the provider, they serve as a guarantor for the loan. They help the lender to have a soft landing if the home buyer defaults on the payment. In such cases, they repay a portion of the VA loan to the lender. Like any other loan, private lenders such as banks, credit unions, or mortgage companies issue VA loans. And this type of loan makes it very easy to acquire a home because you do not need a down payment to secure it.
How does a VA Loan work?
So, how does a VA home loan work? The major distinction with a VA loan is that the government pays back a part of the loan if the veteran who secured it is unable to meet up with payments. Thus, lenders have lesser risk. In turn, they can offer more favorable terms with the loan. And ultimately require no down payment.
You should note, however, that not all lenders offer VA loans. Some simply service VA loan borrowers. Thus, you could apply for a loan with your chosen lender.
Who is eligible for a VA loan?
- If you are in active military service
- If you are a veteran with the required length-of-service requirements
- If the building you want to buy would be your permanent residence. It also has to meet minimum safety guidelines
- If you were married to a service member who died in active service and you have not remarried
- If your income and credit qualify you for the loan
What are the benefits of a VA Home Loan?
Wondering what the benefits of a VA home loan are? A major one is that you do not have to worry about mortgage insurance. Usually, other loan types require you to pay mortgage insurance if the down payment is less than 20%. However, neither down payments nor mortgage insurance are required in VA loans.
- Considerable Interest Rates
ICE Mortgage Technology, a reliable mortgage data provider, shared that VA home loans had lesser interest rates for mortgages averaging 30 years. This is compared to FHA loans.
According to the Department of Veterans Affairs, the lender has a limit of 1% of the loan amount to charge on the origination fee. Also, other closing costs have been halted to accommodate a more comfortable loan experience.
How to apply for a VA Home Loan
If you have been wondering, ‘ how do I get a VA home loan?’ Well, here you go.
- Certificate of Eligibility
To show that you qualify for the loan, you need a VA-approved certificate to show that your military service meets up with the eligibility guidelines.
The trick here is to get pre-approved with several VA mortgage lenders. This will help you to compare their requirements and rates. Thus, you can make a more informed choice of which lender to choose.
Ensure that the home you want to buy is clean and secure. And most importantly, it has to be structurally fit. After this, put an offer on the house.
In conclusion, a VA loan is designed to make getting your desired home a reality as a veteran. So, take advantage of it today and easily move into your dream house.