Are you currently in the military or a veteran who is thinking about buying a home? If so, why not consider a VA home loan? The VA has been helping service members become homeowners for almost 75 years.
Why a VA Home Loan?
A VA home loan is a flexible, no down payment loan option for military members and veterans. These loans have some unique benefits and other allowances not all veterans are aware of.
How a VA Home Loan Works
Let’s walk through how a VA home loan works so you thoroughly understand everything that’s available to you and don’t leave any money on the table.
1. Getting Prequalified
Obtain a VA lender to get an estimation of how much they believe you can afford to borrow for a home purchase. The prequalification is based on your income, current credit status, military entitlement, and other factors associated with your particular financial situation.
2. Find a Home and Make an Offer
Once you’re preapproved and have found a VA approved home, you can make an offer. For this step, it’s best to find a real estate agent who understands the intricacies of a VA loan and know exactly how they work.
3. Obtain a VA Appraisal
After your offer has been accepted, your lender will request a VA appraisal of the home. Then the underwriters will review your financial documents and income along with the finalized appraisal. Once everything is approved, you will be given a clear to close commitment letter.
4. Close on Your New Home
On your closing day, you will sign all the legal documents required to give you possession of that home. You will then be given the keys.
What You Need to Know Before Applying for a VA Home Loan
There are plenty of quirks associated with VA homes and loans. Here are some of the things you need to know before you begin.
- VA loans are unlimited. You can use your VA entitlement as many times as you want as long as your previous loan has been paid in full.
- Only certain types of homes can be considered VA homes.
- A VA home is for a primary residence only.
- A VA home loan doesn’t come from the VA. The VA only provides the guarantee on a qualified mortgage as does the government.
- A VA loan provides service members good terms and favorable rates.
- Service members who have had a foreclosure or bankruptcy in the past can still use their VA entitlement loan benefit.
- No mortgage insurance is required and there is no prepayment penalty. However, these loans do come with a mandatory VA funding fee.
The Bottom Line
If you are currently a military service member or veteran who is thinking about buying a home, why not consider a VA home loan? You earned this benefit, why not use it?