New American Funding Blog

A Guide to VA Home Loans

By Courtney Lynch   |  February 3, 2015

Along with the many other benefits of having served our country, one of the most valuable can often times be the ability to purchase or refinance your home with a veteran home loan, or VA loan. A VA loan is a mortgage that was originally engineered to provide a financing option for veterans and their families or the surviving spouses. It is offered by the U.S. Department of Veteran Affairs and can be applied for through VA-approved mortgage lenders.

How a VA home loan will help you
According to the Summary of VA Home Loan Guaranty Benefits, a VA home loan allows you to purchase a residential condominium or house. You also can use it to build a new home or refinance an existing loan to reduce the interest rate associated with that mortgage. 

With the VA's Cash-Out Refinance Loan, qualifying borrowers may also be able to access their home equity for an investment in education, renovations or home improvements, or pay off other accumulated debt. 

Benefits of a VA home loan

A VA home loan provides the opportunity to purchase a home that may not require a down payment. There is also no mortgage insurance required on VA loans but in most cases depending to the amount of your down payment and other factors, a VA funding fee will be charged at the closing of the loan.

Lower closing costs and interest rates are other potential benefits when compared to conventional loans, and there are no penalties for paying off a VA loan early. 

Am I Eligible? 
According to the U.S. Department of Veteran Affairs, eligibility for a VA home loan is contingent upon the possession of a Certificate of Eligibility, or COE, good credit and sufficient income. The COE may be obtained if a service member has been honorably discharged and meets a minimum of two service requirements that fall under qualifying wartime and peacetime periods, active duty dates and minimum active duty service. 

Additionally, U.S. citizens who provided service in the following organizations may qualify: 

  • Armed forces of a U.S. ally during World War II
  • Air Force 
  • Coast Guard Academy
  • Public health service officers 
  • U.S. Military cadets
  • Midshipmen of the U.S. Naval Academy 
  • National Oceanic and Atmospheric Administration officers
  • Merchant seaman who served in World War II

Spouses of veterans may also apply for a VA home loan if they meet specific requirements. If a spouse's partner is missing, a prisoner of war, or if remarriage has not occurred after a service-induced disability or death he or she may qualify for a VA loan. A spouse that remarries after first reaching the age of 57 may also apply for a VA loan. 

For more details and to see if you qualify for a VA home loan, please visit the U.S. Department of Veteran’s Affairs. And click here to see some of New American Funding’s Veterans.

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