VA Home Loans

VA Home Loan Topics Covered

• What is a VA Home Loan?
• How to Qualify for a VA Home Loan
• Types of VA Home Loans
• Benefits of a VA Home Loan
• VA Home Loan FAQs

What is a VA Home Loan?

VA home loans are ones guaranteed by the U.S. Department of Veterans Affairs. They were created by the government in 1944; since then, more than 24 million VA loans have been originated, helping veterans, active duty military members and their families purchase or refinance a home.

The fact that these loans are backed by a government agency makes lenders feel more comfortable in offering them, as they pose less risk. As a result, it’s possible to get a VA loan without a down payment, and with sometimes-looser credit requirements.

The basic intention of the VA home loan program is to supply home financing to eligible veterans and to help veterans purchase properties with no down payment.

How to Qualify for a VA Home Loan

• Have at least 90 days of active service during wartime or at least 181 days of active service during peacetime.
• Have more than six years of service in the National Guard or Selective Reserve.
• Be the surviving spouse of a service member who died while on active duty or from a service-connected disability and you have not remarried or remarried after age 57 or Dec. 16, 2003. Spouses of prisoners of war or service members missing in action are also eligible.
• Meet the lender’s requirements for credit and income. The VA doesn’t set a minimum credit score for VA loans, but lenders can set their own minimum standards. The lender will also consider your income and debts to evaluate your ability to repay the mortgage.
• Borrowers need to show they have the income to make the mortgage payments and they shouldn’t have a huge debt load.
• The property you want to buy must meet safety standards and building codes and will be your primary residence.
• In order to go through the process, you need to obtain a VA Certificate of Eligibility (COE). Without this certificate, you won’t be able to get your loan.

Types of VA Home Loans

• VA IRRRL (also called a streamline refinance loan) – you can replace an existing VA loan with a mortgage offering a lower interest rate, or move from an adjustable-rate loan to one with a fixed interest rate.
• VA renovation loans – let San Antonio borrowers buy or refinance a home and roll the cost of improvements into the mortgage.
• VA supplemental loans for home improvements – can be added to an existing mortgage or included in a VA refinance.

Benefits of a VA Home Loan

• You can buy a home with no down payment.
• There is no limit to the amount you can borrow on a VA loan.
• You won’t have to pay Private Mortgage Insurance (PMI, since the loans are backed by the government. But the VA does charge a funding fee
• Closing costs are the various fees and expenses you pay to get a mortgage. The Department of Veterans Affairs limits the lender’s origination fee to no more than 1% of the loan amount and prohibits lenders from charging some other closing costs.
• There’s no minimum credit score requirement.
• Mortgage rates are generally lower for VA home loans than for FHA and conventional mortgages.
• There is no prepayment penalty. This means you won’t be fined if you pay off your loan early.
• You don’t need to be a first-time home buyer in order to get a VA loan. You can use the benefit again and again.

Frequently Asked Questions

If I have already obtained one VA loan, can I get another one?

Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you will have full entitlement. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.

Are the children of a living or deceased veteran eligible for the home loan benefit?

No, the children of an eligible veteran are not eligible for the home loan benefit.

What is the maximum amount for a VA loan?

If you do not have a VA loan currently, there is no limit to the loan amount with 100% financing.

In the end, the VA loan program can be a big help to those who have served their country and want to achieve the dream of homeownership.