Veteran’s Administration Loans are offered to qualified, active and retired service men and women seeking to purchase a home. Last year, over 600,000 VA loans were completed through this program, making it a popular perk for veterans. A VA loan offers benefits over a traditional mortgage, plus an additional guarantee backed by the U.S. Department of Veterans’ Affairs. If you’re eligible for a VA Loan, it’s a good idea to work with a mortgage lender who is familiar with this loan product to ensure you get the best possible financing terms available.
Who Qualifies?
VA Loans are offered to current service members and veterans meeting minimum active duty requirements. Surviving spouses may also be eligible if they meet the criteria set by the Department of Veterans’ Affairs. You will need to obtain a Certificate of Eligibility for the VA Loan program. You can apply for this certificate online, or with the assistance of your mortgage lender.
Benefits
VA Loans offer several benefits to those who are eligible. If the lack of a down payment has delayed your home purchase, then a VA Loan may help you obtain a mortgage faster, as there are no minimum down payment requirements. VA Loans also allow for higher loan limits than FHA mortgages. Private mortgage insurance, also known as PMI, is not charged on VA loans. This generates an annual costs savings for those with a down payment less than twenty percent. Backed by the Department of Veterans’ Affairs, the program offers an additional guarantee of payment to give sellers and lenders confidence and help you purchase a home.
Closing Costs
Closing costs are generally lower than those charged for other loans. The VA provides a list of acceptable closing costs for a loan granted through their program. A VA funding fee may also be charged, which can be rolled into the loan amount. The seller typically pays for the cost of a termite inspection and the home must meet VA inspection guidelines. You should work with your real estate agent to determine which closing costs you, as a buyer, will need to cover, and budget appropriately.
Application and Approval
The application and approval process is handled through a mortgage lender. It’s a good idea to work with a lender who has experience granting VA loans. An application must be completed and reviewed prior to approval. There is no minimum credit score required for a VA Loan, but you can expect lenders to evaluate a variety of factors, including your credit history and income. VA Loans may only be used to purchase a primary residence, not a vacation or second home.
If you’d like to take advantage of the benefits of a VA Loan, contact BrightPath Mortgage today to find out more about the program.
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