VA Loan

From LoveToKnow Mortgage

Veterans looking for home loans may want to look into getting a VA loan. Read on to find out about these specialty loans and to learn more about eligibility requirements.

VA loans are a helpful financial resource for military personnel.

VA Loan Basics

A veteran’s assistance loan is a guaranteed loan available to eligible veterans for the purchase of a home. Though the loans are made by private lenders, such as banks or mortgage companies, the loan is actually guaranteed by the federal government, which means that the lender is protected against loss should the borrower default on the loan. This works well for both parties, because it allows borrowers to receive a home loan with no down payment and other favorable financing terms. Other benefits of a VA loan include:

  • Negotiable interest rates
  • Closing costs are comparable to other loans or lower
  • Private mortgage insurance is not necessary
  • No prepayment penalties
  • VA assistance to borrowers who are in default

A basic loan entitlement is $36,000. However, most lenders will lend veterans up to four times the amount of the veteran’s entitlement. For loans that exceed $144,000, additional entitlement may be available. As of January 2006, qualified veterans can get a no down payment loan up to $417,000.

To obtain a VA loan, there is a funding fee that must be paid. The funding fee is required by law and is intended to enable veterans to contribute towards the cost of this veteran benefit, thus relieving the taxpayers’ burden. To determine the exact fee that you would pay, visit the Funding Fee Table.

Eligibility Requirements

Veterans' loans are supported by the federal government.

The first eligibility requirement is that you must be a veteran. However, if you are a veteran, you are not necessarily guaranteed a loan. Lenders must still follow all of the credit and income standards that have been set by policymakers.

To prove your eligibility, you must also:

  • Show proof of military service
  • Sign a certified statement saying that you will occupy the home
  • Purchase a property on U.S. soil or in a U.S. controlled territory

To learn more about eligibility requirements, visit the VA website.

Applying for a VA Loan

The application process is relatively easy and very similar to applying for a traditional loan. Here are the steps:

  • Find a home that you are interested in. Make an offer and sign a purchase agreement that is contingent on the approval of your loan.
  • Select a lender that you want to work with.
  • Get or present a Certificate of Eligibility. You can apply for a certificate with the lender or by filling out VA Form 26-1880.
  • Within a short amount of time, the lender will inform you of your approval status. If you are approved for the loan, a date will be set for closing.

If you need help applying for a VA loan, contact your regional VA loan center.

In Conclusion

There are many different benefits to getting a VA loan. If you are a veteran and feel you may be eligible, these specialized loans are worth checking into. Plus, as a veteran, you deserve to take advantage of this benefit.

As with any loan, make sure you take time to shop around and compare lenders. Rates, loan terms, and conditions will vary. By shopping around, you ensure that you get the best deal possible on your loan.

To learn more about loans, eligibility requirements, and other terms and conditions, visit Home Loan Guaranty Services on the United States Department of Veterans Affairs website.


 


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