Curious about VA loans and how they work? Are you currently active military or a veteran thinking about buying a home? If so, why not consider choosing a VA Home Loan for your home financing? The Department of Veteran Affairs has helped service members become homeowners for more than 75 years.
Why Choose a VA Home Loan?
A VA home loan is a flexible, no down payment loan option for military members and veterans. In fact, these loans provide veterans with unique benefits and other allowances not provided in other types of home loans.
How VA Home Loans Works
Let’s walk through how a VA home loan works so you thoroughly understand the process.
- Getting Pre-qualified
To begin with, your lender will verify your income, current credit status, military entitlement, and other factors associated with your particular financial situation.
- Find a Home and Make an Offer
After this pre-approval process you can start your home search with your real estate agent and make an offer. It’s best to work with an agent who understands how VA loans work because many listing agents misinform their sellers about VA financing.
- Obtain the VA Appraisal
After the offer has been accepted, your lender will request a VA appraisal of the home. The underwriters will review your financial documents and income along with the finalized appraisal. Once everything has been approved by the underwriters, a clear to close commitment letter gives the buyer the okay to close.
- Close on Your Home
On your closing day, you will sign all the legal documents required to give you the keys and possession to your home.
What You Need to Know before Applying for a VA Home Loan
There are plenty of quirks associated with VA home loans. Here are some of the things you need to know before you begin:
- You can use your VA entitlement as many times as you want as long as your previous loan has been paid in full.
- Not all homes will qualify for a VA home loan.
- VA home loans are for primary residence only.
- The VA only provides the lender a guarantee on a qualified mortgage.
- The VA does not write loans.
- VA home loans provide service members with good terms and favorable rates.
- Service members who have had a foreclosure or bankruptcy in the past can still use their VA entitlement benefits.
- There is no mortgage insurance required and no prepayment penalty.
- However, these loans do come with a mandatory VA funding fee unless you are a disabled veteran.
The Bottom Line
If you are currently a military service member or veteran who is thinking about buying a home, you should consider a VA home loan? You earned this benefit, why not use it?
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