In the year 1944, the VA Loan was created by the government in order to help the service members, who returned from war field. Since then, Veterans Affairs department has helped almost 18 million military service members to purchase home.
VA Home Loan is the most flexible as well as powerful option for lending loans that is available in the market.
While issuing such loans, the Veteran Affairs will pledge that they will repay almost 25% of loan amount in unlikely event of any default by the borrower. Due to this protection, military personnel can obtain loan at very affordable rates and terms.
What are key benefits of VA loan?
One of the most important benefits of VA loan is that the borrower can get such loan without any down payment. Following are few key benefits of VA loans:
- Loans available at competitive interest rates which are lower as compared to conventional rates
- Sellers can pay maximum up to 6% of closing cost or concession
- No prepayment penalties
- Streamlined refinancing loans which need no additional underwriting
- Higher allowable ratios for debt-to-income, as compared to many other loans
Who are eligible for VA loan?
All across the country, there are millions of veterans as well as active-duty service members available who are eligible for VA Loan. Following are the criteria for obtaining VA loan
- People who have already spent minimum 6 years in the services as National Guard or as reserves
- Military members who must have served at least 181 days on any active duty or 3 months during wartime.
- Spouses of those got killed in during the line of active duty
Certificate of eligibility
In order to obtain VA loan, the veterans or those who are in active service need to obtain a certificate of eligibility for applying for such loans. This certificate will be provided by the VA authorities.
They will in fact check whether the prospective borrower is really entitled for obtaining such loans. While issuing the certificate of guarantee, the VA authority will also make the entitlements of the money to the applicant.
This certificate of eligibility request can be downloaded from online and the veterans can apply for the same.
What can one buy with VA loan?
One can buy the following with VA loan
- Refinance for taking out cash
- Refinance any existing VA-guaranteed or any direct loan for lowering the current rate of interest
- For repairing, altering or improving residence owned by veteran
- Purchase and also improve home simultaneously
- In conjunction with VA purchase/VA refinance making any energy efficiency improvements with the help of Energy Efficient Mortgage
- Buying any one-family residential unit within condo development which is approved by VA
- Buying any farm residence in order to own and occupy by the veteran
- Buying any manufactured/modular home
Do Veterans need to make payment for Anything?
- Only 2.15% without down payment
- Only 1.50% with 5% or little more down payment
- Only 1.25% with 10% or little more down payment
National guard and reserves
- Only 2.4% without down payment
- Only 1.75% with 5% down payment
- Only 1.50% with 10% down payment