VA Loan

VA loans offer several exclusive advantages for service members, Veterans, and military spouses. One of the most significant benefits is the ability to purchase a home with no down payment, making homeownership accessible without the need to save for years. Additionally, VA loans come with lower interest rates compared to Conventional loans, adding to the affordability.

These loans also eliminate the need for monthly mortgage insurance premiums, which can save hundreds of dollars each month. There’s no prepayment penalty, so you can refinance or sell your home anytime without extra fees, although specific rules apply to Cash-Out Refinances.

Other benefits include reduced funding fees or even exemptions for Veterans receiving disability compensation. The funding fee can be financed into the loan, easing upfront costs. VA loans are forgiving regarding credit scores, often accepting less-than-perfect credit.

They also allow up to 100% Cash-Out Refinancing, giving you flexibility to use your home’s equity. Plus, VA offers support for borrowers facing financial hardships, ensuring continued assistance beyond the loan approval.

To qualify for a VA home loan, you need to meet specific criteria set by the United States Department of Veteran Affairs. First, you'll need a Certificate of Eligibility (COE), which you can obtain if you've been honorably discharged and meet the service requirements during designated wartime and peacetime periods.

Eligibility isn't limited to just those in the U.S. armed forces. If you served in any of the following capacities, you might also 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, officers of the National Oceanic and Atmospheric Administration, or as a Merchant Seaman during World War II.

Spouses of veterans can also be eligible for a VA home loan under certain conditions, such as if their partner is missing, a prisoner of war, or if they have not remarried after their partner passed away or was disabled due to service. Additionally, spouses who remarry after the age of 57 may qualify.

To qualify for a VA loan, you need to meet one of the following service criteria:

• 90 days of active duty during wartime.
• 181 continuous days of service during peacetime.
• 6 or more years in the National Guard or Reserves.
• You are the un-remarried, surviving spouse of a service member who passed away in the line of duty or from a service-related disability.

Additional VA Loan Requirements:

Funding Fee: This fee varies based on your down payment and whether it's your first or subsequent VA loan. For first-time users with no down payment, the fee is 2.3% of the loan amount. With a down payment of 5% to 9.99%, it drops to 1.65%, and for 10% or more, it's 1.4%. For subsequent uses, the fee is 3.6% with no down payment, but remains the same as first-time use for down payments over 5%.

Occupancy: Borrowers must generally move into their new home within 60 days of purchase, although some exceptions may apply.

Primary Residence: VA loans are strictly for primary residences and cannot be used for investment properties or second homes.

VA Streamline Refinance Loan (IRRRL) If you have an existing VA loan, consider the VA Streamline Refinance for a simpler way to reduce your interest rate and monthly payment. This option requires no bank statements, W2s, or pay stubs.

VA Purchase Loan 

Opt for a fixed-rate VA Purchase Loan for consistent payments throughout your loan term, or choose an Adjustable-Rate Mortgage (ARM) if you're planning a shorter stay in your home, such as military personnel expecting relocation orders.

VA Cash-Out Refinance 

This option lets you tap into your home equity to access cash for various needs like debt consolidation or home improvements. It’s available even if your original mortgage wasn't a VA loan and allows refinancing up to 100% of your home’s value.

VA Energy Efficient Mortgage 

Upgrade your home with energy-saving features like solar panels or new insulation with this addition to your VA loan, capped at $6,000 for improvements.

VA Native American Direct Loan (NADL) 

For Native American Veterans or those with Native American spouses, the NADL program offers direct loans for building, buying, or improving a home on federal trust land, with no down payment or mortgage insurance required.

Exploring Other Options? Check out today’s rates for Conventional and other mortgage loans to find the best fit for your financial needs.

1. Obtain a Certificate of Eligibility (COE): This certificate confirms your eligibility for a VA loan. Your mortgage specialist will assist you in gathering the necessary personal and military service details to apply.

2. Consult with a Mortgage Specialist: They will help you navigate through the various VA loan options and select the best one tailored to your needs.

3. Find a Real Estate Agent: Your lender can connect you with a trusted agent from their network to help you find and secure your new home.

4. Home Appraisal: Your lender will arrange for a VA approved appraiser to evaluate the property’s value.

5. Loan Approval and Closing: If your lender is VA authorized, they can approve and close your loan without separate VA approval, speeding up the process.

6. Become a Homeowner: Once the loan closes, you can celebrate homeownership!

How often can I use a VA Loan? 

Your VA loan eligibility is lifelong. You can use it multiple times based on your entitlement, which varies according to your loan terms.

What is VA Loan Entitlement? 

This is the portion of your VA loan that's guaranteed by the Department of Veterans Affairs, protecting your lender if you default on your mortgage.

Can I have more than one VA Loan? 

Yes, under certain conditions like a Permanent Change of Station, you can have a second VA loan for another primary residence.

Can I refinance a VA Loan? 

Absolutely. You can opt for a VA Cash-Out Refinance or a VA Interest Rate Reduction Refinance Loan (IRRRL).

Can I switch my FHA Loan to a VA Loan? 

Yes, refinancing from an FHA to a VA loan is possible and might offer lower rates or other benefits.

What if I defaulted on a previous VA Loan?

You can still apply for a new VA loan, but your entitlement might be reduced, and there might be a waiting period, typically two years after foreclosure.

Can a surviving spouse of a deceased veteran get a VA home loan? 

Yes, if the Veteran passed away due to military service or service-related injuries and the spouse hasn’t remarried.

Do VA loans require PMI? 

No, VA loans do not require private mortgage insurance, setting them apart from FHA and Conventional loans.

How can I avoid closing costs on a VA loan? 

Sellers can pay some or all of the closing costs for VA loans, which also cap the amount you might owe at closing.

What’s the difference between a VA loan and a traditional mortgage? 

VA loans require no down payment and no PMI, often feature lower interest rates, and are government-backed. Traditional mortgages typically require PMI if the down payment is less than 20%.

What is Basic Allowance for Housing (BAH)?

BAH is a military benefit for active-duty personnel to help with housing costs, based on location and pay grade. It can be used for rent or mortgage payments, helping service members start building home equity without a down payment.

What is a COE? 

A Certificate of Eligibility (COE) is essential for progressing with a VA loan, as it confirms your service duration and character, qualifying you for the loan. It also plays a role in determining your Funding Fee. You can obtain a COE through your loan officer or directly from the Department of Veterans Affairs either online or by mail.

How do I apply for a COE?

• Through Your Lender: Your lender can quickly access a database to retrieve your COE.
• Via the VA Website: Apply directly on the VA’s official site.
• By Mail: Fill out the VA Form 26-1880 and send it to the VA with proof of eligibility.

What documentation is needed? 

The required documentation varies based on whether you are active duty or discharged, including personal identification and service details.

What is next after getting a COE? 

Once you have your COE, you can start the home loan process, though you must still meet your lender’s criteria for income, credit score, and debt-to-income ratio.