If you are an active or retired member of the United States military you may be eligible to qualify for a VA home loan, which offers great benefits that can make purchasing a home easier than you might think. However, there are many things to consider when applying for one, so it’s important to take the time to learn about what they are and how they can help you avoid problems in the future. These five things every veteran needs to know about VA Home Loans will get you started on your way toward qualifying and enjoying your new home sooner than possibly expected.
A VA loan is a type of mortgage guaranteed by the United States Department of Veterans Affairs. The VA guarantees home loans for eligible veterans, active-duty service members, and qualifying surviving spouses. It comes with many benefits to the veteran. Let’s discuss a few of those. One aspect of a VA loan that stands out above other loan programs is the $0 down payment requirement. This can help veterans who have little to nothing saved for a down payment. It also doesn’t require mortgage insurance to be carried on your loan. This can ultimately mean more purchasing power for VA home loan buyers due to the payment being lower. Also, there are no loan limits if you have full VA loan entitlement as of January 1st, 2020, so that million-dollar home you’ve been eyeing online could be yours if your income qualifies for that amount.
To qualify for a VA home loan, you must have served on active duty for at least 90 days and received an honorable discharge. National Guard/Reservists may also qualify depending on the number of Military Retirement points they have accrued during their service. There are also some exceptions for reservists who were activated after September 11th, 2001. Here are the needed documents your lender will require to determine your eligibility & entitlement depending on your Military status:
* Active Military: Current Proof of Service Statement
* Retired Military: DD214
* National Guard/Reserves: Military Retirement Point Statement & DD214
Having the above documentation will allow your mortgage lender to contact the VA and request your VA Certificate of Eligibility. This document will tell them whether you are eligible for a VA home loan. If you are unsure on how to obtain these documents, we can help with that too!
Even though VA loans do not require a down payment, they do come with fees and closing costs that can add up quickly. For example, VA mortgages require a funding fee of up to 3.6% of your purchase price but rest assured that is generally added to your loan, so there is no upfront/out-of-pocket cost on that. If you have a VA disability rating of 10% or more, it is likely the required VA funding fee would be waived. Other fees that may be included are the cost of an appraisal, title fees, underwriting/processing fees, and any other transaction-specific fees. So, while the VA home loan is more cost-effective at the closing table due to the no down payment requirement, you will still have some costs associated with buying the home unless the seller of the property is willing to pay those for you.
Many Service Members, especially those with little or no home buying experience, often feel disoriented and hesitant when they hear about VA loans and the pre-approval process. Here at Spire Financial, we feel that knowledge is power and our intention is to have you power stepping toward homeownership knowing what every veteran needs to know after you are pre- approved, so you have the smoothest home buying experience possible. Below are a few of the items we look at:
• Credit history
• Credit score
• Employment history
• VA home loan eligibility
• Current debts vs current income
Basically, the pre-approval process is a health check on your finances ensuring you are ready to start looking at homes. It also gives us a chance to discuss anything that might potentially be standing in your way of homeownership, so you can get a game plan established.
Take the next step and talk with a trusted mortgage loan officer at Spire Financial that has experience with VA loans. They will guide you through the pre-approval process and get you on your way toward homeownership. We are looking forward to being of service to YOU on this homeownership journey.
Spire Financial (A Division of V.I.P. Mortgage, Inc.) brings lending expertise to you. All of our loan officers offer personalized communication for every client, guiding them through the process. We can show you ways to maximize your finances and unlock future opportunities. Spire Financial keeps you in control of refinancing, debt consolidation, and home equity. Together, we can achieve your financial goals.
V.I.P. Mortgage, Inc. DBA Spire Financial does Business in Accordance with Federal Fair Lending Laws. NMLS ID 145502. For state specific licensing, visit www.vipmtginc.com/national-licenses/. V.I.P. Mortgage, Inc. is not acting on behalf of or at the direction of the FHA/HUD or the Federal Government. This product or service has not been approved or endorsed by any governmental agency, and this offer is not being made by any agency of the government. V.I.P. Mortgage, Inc. is approved to participate in FHA programs but the products and services performed by V.I.P. Mortgage, Inc. are not coming directly from HUD or FHA. Information, rates, and programs are subject to change without notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions may apply. This is not an offer to enter into an agreement. Not all customers will qualify.