Could a VA Loan be Right for You?

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We’ve got a special place in our hearts for our military servicemen and women. That’s why we understand the needs of our military clients and their families. It’s the reason we take such pride in providing the best service available for those we hold so close to our hearts.

In keeping with our commitment to our veterans, we wanted to share some critical information regarding VA housing loans so many of our clients are eager to use. Here are a few of the questions we hear, and we hope the answers will help you decide if a VA loan is right for you.

Who is eligible for a VA loan?

According to http://www.valoans.com/ you may qualify for a VA loan if:

- You enlisted and began service before Sept. 7, 1980, or served as an officer before Oct. 16, 1981
and
- You’ve served at least 90 days of active duty during wartime; and/or
- You’ve served at least 181 days of active duty during peacetime
- You were not dishonorably discharged
- After Sept. 7, 1980, you served a minimum of two years of active duty and were not dishonorably discharged

- After Oct. 16, 1980 you served as an officer for a minimum of two years of active duty and were not dishonorably discharged

- You’ve served six years with the National Guard or as a reservist, were not dishonorably discharged and meet other specific criteria

- You are the surviving spouse of a veteran and you meet specific criteria

What are the advantages of a VA loan?

VA loans are the best mortgage loans on the market for these reasons:

- They are the only true 100% mortgage loan that does not require any down payment.
- They are free of most of the junk fees that affect other loans.
- They do not require private mortgage insurance (PMI).
- The home’s seller is required to cover a portion of closing costs, including paying for a termite inspection.
- A VA loan is assumable which allows another eligible veteran to take over the loan at whatever rate you locked in, even if current market rates are much higher, which is a huge selling point.

How do I apply for a VA loan?

While many traditional lenders can do VA loans, we’d encourage you to call us first so we can match you with one of several of our preferred lenders who excel in processing VA loans. In addition, here are a few other tips.

- Be sure to secure your Certificate of Eligibility (COE) for Home Loan Benefits as soon as you think you may be ready to purchase a home. Click here to download an easy-to-follow guide for how to apply for your COE.

- Examine your credit report to be sure all of the information is accurate. Experts recommend that you do this up to a year before you plan to buy a home so that you have time to clear up any mistakes or take action to reconcile any negative information that may appear. Even if you don’t have that long, you should still carefully review your credit report so you can see what the bank will see.

- Once you have your COE and you’re comfortable with your credit report, you’re ready to talk with the lender to begin the process, and we’d be happy to help you with everything.

How does a VA loan work?

While a VA home loan works much like other types of loans, there are a few things you need to know.

1. You will be assessed a one-time funding fee that could range from 1.15% - 3% of the loan amount, depending on whether you’re a first-time home buyer or not. Often this fee can be incorporated into the final loan amount.

2. Even though in most cases a VA loan does not require a down payment, if you do put down at least 5%, the government will reduce the one-time funding fee amount.

3. The money that funds your loan comes from the private lender, not from the VA. The role of the VA is to issue a loan guaranty, which promises to pay the lender a certain percentage of your loan if the bank has to foreclose on your home.

The good news is that applying for a VA loan is relatively simple and straightforward, especially once you’ve secured your Certificate of Eligibility, and we’re here to help however we can. 

Thanks to all of those servicemen and women for their bravery and their dedication to duty, and our gratitude to their families for their strength and support. Please let us know if there is ever anything we can do to be of service to you!