VA Home Loans are quite popular because they can help veterans get the homes of their dreams in return for their services to the US Armed Services. They are helped by the government because a portion of each loan is guaranteed by the Veterans Administration and it protects the lender, just in case the borrower defaults.
What Are the Benefits of a VA Home Loan?
There are many benefits to a VA home loan, including complete financing and no down payment loans, no private mortgage insurance (PMI), competitive interest rates, no penalties if the loan is prepaid, loan qualifications are easier than with a traditional loan, and the sellers can pay all of the closing costs.
What is Entitlement?
Entitlement is the guaranteed amount of the VA loan, which currently is a maximum of $36,000 for loans up to $144,000. The exact figure comes from your loan amount. The maximum entitlement is $60,000 for any loans over $144,000. This number is not a cash payment, but instead it is the amount that the VA will pay to the lender if you default your loan - of course, the VA may go after you go get those.
Who Can Get a VA Loan?
Any wartime or conflict veterans who served at least 90 days who were not dishonorably discharged are eligible. This includes World War II veterans (served September 16, 1940 to July 25, 1947), Korean Conflict veterans (served June 27, 1950 to January 31, 1955), Vietnam Era veterans (served August 5, 1964 to May 7, 1975), Persian Gulf veterans (check with regional VA), and Afghanistan and Iraq veterans (check VA website). You are also eligible for a VA loan if you served at least 181 of continuous active duty during Peacetime if you were not dishonorably discharged.
Are Members of the Reserves and/or National Guard Eligible for a VA Loan?
Those who completed 6 years of service and were honorably discharged or at still serving may be eligible - call the regional office for details.
There are other types of services that make you eligible for a VA loan, including those who served with allied forces, surviving spouses, and spouses of P.O.W. M.I.A.. Contact the regional VA office if you believe that you fall into those categories.
How Do I Get a Certificate of Eligibility?
This is a document that was issued by the VA so that vendors know you are eligible to apply for a VA loan. You can go directly through your regional VA office.
Can I Buy Any Type of Home with a VA Loan?
The home that you purchase must be in the US or its territories, but you can buy an existing single family home, a townhouse or condo in a VA-approved area, a new construction home, a manufactured home, or to refinance your home.
What is a Funding Fee?
When the VA loan closes, you must pay a fee of 2% (2.75% for reservists) to the VA. The fee is reduced if you make a down payment.
Can I Get a Second VA Loan?
Perhaps, you can get a second loan if the property has been sold and the loan is paid in full or if a qualified veteran assumes your loan.