January 27th, 2019 9:41 AM by Jackie A. Graves
FREE VA Home Purchase Analysis
What Is a VA Loan?
A VA loan is a
mortgage loan that’s backed by the Department of Veterans Affairs (VA) for
those who have served or are presently serving in the U.S. military. While
the VA does not lend money for VA loans, it backs loans made by private lenders
(banks, savings and loans, or mortgage companies) to veterans, active military
personnel, and military spouses who qualify.
There are three types
of VA loans: purchase loans, interest
rate reduction refinance loans (or IRRRL, also referred to as a
VA streamline refinance loan), and cash-out refinance loans. There are many
benefits to a VA loan, but one of biggest benefits is that no down
payment is needed to purchase a home. This can make home ownership a reality
for active military or veterans who might otherwise not be able to afford it.
Who Is Eligible for VA
VA loans are designed
for military personnel, veterans, and military families. The list of those who
are eligible for this home-buying military benefit include:
National Guard members
You must also
have suitable credit, sufficient income, and a valid Certificate of
Eligibility (COE). And you must use the home for your own
personal occupancy. Still unsure if you’re eligible? Check the Department
of Veterans Affairs website for a detailed list of eligibility requirements for military service
members, veterans, and military spouses.
What Are the Benefits?
The VA loan program
offers some of the most attractive and flexible loan benefits available, and
they are exclusively for military personnel, veterans and their families.
Perhaps the two biggest benefits that make these loan more affordable than a
typical loan are that the borrower typically does not need to make a down
payment, and there is no private mortgage insurance (PMI)
Here’s a look at the
complete list of benefits, as taken directly from the Veterans Affairs
No down payment required
(unless required by the lender or the purchase price is more than the VA loan limits)
competitive interest rate.
Ability to finance
the VA funding fee (plus
reduced funding fees with a down payment of at least 5 percent and exemption
for veterans receiving VA compensation).
VA rules limit the
amount you can be charged for closing costs.
Closing costs are
comparable with other financing types (and may be lower).
Closing costs may be
paid by the seller.
No private mortgage
insurance premiums are required.
Right to prepay your
mortgage without penalty.
For homes inspected by
VA during construction, a warranty from builder and assistance from VA to
obtain cooperation of builder.
VA assistance to
veteran borrowers in default due to temporary financial difficulty.
How Can Veterans &
Military Personnel Get VA Loans?
military personnel, and military families can follow these steps to get a VA
Make sure you are
eligible for a VA loan. Check the VA
website for a detailed list of eligibility requirements
for military service members, veterans, and military spouses.
Find a lender that
participates in the VA home loan program. You can find a VA
lender in your area here.
Get a Certificate
of Eligibility from the VA to prove you are eligible for a VA loan.
Learn how to get a
Certificate of Eligibility here. Or, your lender can request one on
Apply for your VA
loan. Your VA lender will work with you to complete the steps needed to finance
HHow Big of a VA Loan Can Veterans &
Military Personnel Get?
According to the VA
there is “no maximum that an eligible veteran may borrow using a VA-guaranteed
loan.” However, there are county limits that must be used to calculate the VA’s
maximum guaranty amount for a particular county. In other words, there’s no
limit to how much you can spend on your new home with a VA loan, but the VA has
limits on how much liability it will assume, which can affect the amount
of money your lender will let you borrow.
veterans or military personnel can get loans up to $417,000 with no money down.
But that number can be much higher in certain counties that have a higher cost
of living. Review the list of county
limits for VA loans here.
How to Find a VA
There are many ways
for veterans and military personnel to find a VA lender, such as getting
recommendations from friends, or searching on the VA website. And just
like conventional loans, it can pay to shop around and talk to several
Zillow helps make it
easy to find a VA lender in your area. Use this link to answer a few questions about the home
you want to buy, and you’ll find a VA lender in minutes. You can also shop for live, custom VA loan mortgage quotes anonymously
on Zillow, and then contact the lenders whose quotes you are interested
in. Be sure to check the “Military/Veteran?” box so that VA loans will
come up in your search results.
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