VA Home Loans

Qualified veterans and military members can earn up to $417,000 for a home loan guaranteed by the Department of Veteran Affairs. That amount could even be more depending on the cost of living in some select areas. The program began in 1944 and since then more than 20 million veterans have received loans. For fiscal year 2013, more than 629,000 loans were guaranteed totaling more than $141 billion.

Advantages

A VA loan offers advantages over a non-VA loan that can save you bucks and make it more likely you will be approved.

  • No Down Payment: you often have no up-front, out-of-pocket expenses with the VA home loan. This is because a VA loan doesn't require a down payment and with VA loans the seller is allowed to pay the closing costs for you.

  • No Monthly Mortgage Insurance: mortgage insurance can run $100 - $200 a month on a non-VA loan. But since the VA guarantees VA loans, you don't need mortgage insurance. You don't have to pay that extra money each month.

  • Low Interest Rate: VA loans often have lower interest rates than non-VA loans. On a $400,000 mortgage, this could lower payments $100 a month, maybe more.

  • No Out-of-Pocket Closing Costs: on a non-VA loan, you pay miscellaneous up-front fees, such as for processing or underwriting the loan. These fees can run around 3% of the loan amount - thousands of dollars. Most of the time on a VA Loan, you will not have to pay any out-of-pocket closing costs because the VA allows the seller to pay them for you.

  • Adjustable-Rate & Fixed-Rate Loans: an adjustable-rate loan starts off at a slightly lower interest rate than a fixed-rate loan. Most often it stays at this rate for three, five or seven years. After that, the interest rate changes every year to the current interest rate. A fixed-rate loan has an interest rate that stays fixed. The interest rate at the time the loan is finalized is the interest rate for the life of the loan. You choose which type of interest rate you want with a VA loan: adjustable or fixed.

  • Additional Benefits for Disabled Veterans: if you are 10% disabled or more, the VA waives the funding fee.

To start taking advantage of your VA Loan benefits, complete the short form below to connect with a VA Specialist.

Eligibility

The first step toward getting a VA loan is to have the VA confirm your eligibility. To do that, you need to file a request for a Certificate of Eligibility with the VA. You are eligible for a VA loan if you are in one of seven categories:

  1. War - 90 Days: you served 90 days in World War II, the Korean War or the Vietnam War or you served in the Gulf War (Iraq or Afghanistan) for the full period of your call-up (at least 90 days).

  2. Peace - 181 Days: you served 181 active duty days during peacetime.

  3. Since Aug. 2, 1990 - 2 Years: you served two years of continuous active duty. If you served in the Gulf War (Iraq or Afghanistan) during this time, see option 1.

  4. Selected Reserves or National Guard - 6 Years: you served six years in either of these services.

  5. Active Duty - 181 Days: you have served 181 days of regular active duty.

  6. Spouses: you are the spouse of a veteran who died while in the service or who died from a service-connected disability, and you have not remarried or you are the spouse of a service member who is missing in action or is a prisoner of war.

  7. Other Service: you are a U.S. citizen who served in an Allied armed force during World War II or you have service in any of several other organizations, including:

    • Officer in the Public Health Service

    • Cadet at a military-service academy

    • Officer in the National Oceanic and Atmospheric Administration

    • Merchant seaman with World War II service

  8. Four Step Process

    After you've decided that a VA loan is right for you and the VA confirms your eligibility, getting that loan and getting into your home is a four-step process.

    1. Find a VA-Approved Lender

      Thousands of lenders offer VA loans. However, remember to use a lender that specializes in them; the paperwork and regulations differ from non-VA loans. A VA loan specialist can make the process a breeze. Joe can recommend lenders that specialize in VA loans.

    2. Pre-qualify

      After you select a lender, you’ll want your lender to give you an estimate of how much you can borrow. Every lender will ask different questions, but having documents and information handy from the following five categories will save you time:

      • Eligibility Information: completed request for a Certificate of Eligibility; completed Certificate of Release or Discharge from Active Duty.

      • Employment Information: W2s and tax forms for the past two years, three years of tax forms if you are self-employed; pay stubs covering the past month

      • Credit Information: know your credit score. VA lenders look for a minimum score of 620

      • Saving Information: have the last three months of bank statements as well as statement from inheritances, mutual funds, stocks, bonds, 401k’s, retirement accounts, etc.

      • Personal Information: you need a copy of your driver’s license and copy of your social security card. If applicable, you will also need copies of divorce, palimony or alimony papers; copy of green card or work permit

    3. Find Your Home

      Go out and find that home you want! Since you already have completed the pre-qualify step, you know how much you can spend on that home. After you find it, you need to:

      • Create a Purchase Contract: you and the home’s seller draw up a purchase contract, a document that explains the terms of the sale. Besides the home’s price, the purchase contract may cover inspections, restrictions and easements, liens on the property, disclosures, prior leases, preparing of documents for closing, maintenance of the property up to closing, and other items.

      • Have the Home Appraised: next, a VA-licensed appraiser estimates the value of the home and issues a Certificate of Reasonable Value (CRV). The loan amount cannot exceed the CRV.

    4. Submit, Sign, Move In!

      You've done the hard parts. Submit the application and if all parties agree on the terms, the loan is almost certainly a done deal. Lots of other details can crop up between now and when you sign on the dotted line, but usually if you've made it this far the lender will approve the loan. And then - moving party!

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