Buying a home is a complex process, and getting a VA-backed loan is only one stage of the many processes. For many years, the VA home loan benefit has helped millions of veterans, service members, and military families achieve the dream of becoming homeowners. For sure, buying a home using your VA loan benefits can be one of the most exciting transactions you'll ever make, whether it is for your first or your next home. But there will be times in the process where it can be frustrating and you will feel uncertain.
In the process of homebuying using VA home loans, there are times that it is very difficult to understand the program's unique benefits and features. So, let’s look at the what, when, where, and why of VA home loans and let’s discover how it is different from other loans to help you, VA homebuyers, get the most from your hard-earned benefits.
What is a VA Home Loan?
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Veterans Affairs Home Loan is an assistance program for Servicemembers, Veterans, and eligible surviving spouses to become homeowners.
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VA Home Loans provide a home loan guarantee benefit and other housing-related programs to help its members buy, build, repair, retain, or adapt a home for your own personal occupancy.
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VA Home Loans are provided by private lenders, such as banks and mortgage companies. VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.
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VA Home loans are $0-down mortgage options issued by private lenders and partially backed, or guaranteed, by the Department of Veterans Affairs.
Source:https://www.benefits.va.gov/HOMELOANS/scra.asp
When to use VA Home Loan?
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When you are buying for your primary residence including single-family homes, condos, modular housing, and some multi-unit properties, you can get a VA. It is mainly designed for properties in "move-in ready" condition.
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Mortgage loans typically require a minimum of 3% as a down payment. So, when you want a 0% down payment a VA loan is what you need. With the VA loan, you don’t have to make a down payment at all.
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Most lenders require private mortgage insurance (PMI) on loans with a down payment under 20%. So, When you want to make a down payment of less than 20%, you can use your VA Home Loan. One of the best perks about using a VA loan is there is no PMI requirement regardless of the size of your down payment (or if you don’t make one at all).
Where can you get assistance and where to get it?
Applying for a mortgage can be complicated and for a VA loan, it can be even more. VA Loans are specialized products that some real estate agents and lenders are more familiar with than others. A real estate agent who understands the promise and potential of this program can save you time and money in a lot of ways. Once you have a savvy agent, you can check out some of these VA loan lenders.
The 7 Best VA Loan Lenders for 2020
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Veterans United Home Loans
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USAA
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Navy Federal Credit Union
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PenFed Credit Union
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Veterans First Mortgage
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Quicken Loans
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LendingTree
Source: https://money.com/best-va-loans/
1. Zero Down VA Home Loans
VA mortgages require no money down in most cases. Zero down for a home loan is a huge advantage, especially for lower-ranking junior enlisted personnel.
2. Lower Costs, No Private Mortgage Insurance
Veterans financing homes via the VA possess the flexibility to negotiate expenses right with lenders. The VA home loan program or the participating lenders don’t set interest rates, the number of closing costs, or additional charges.
As for the PMI, the mortgage is insured by the federal government, reduces the risk of loss for the lender. The mortgage insurance shields lenders against all losses that result from veterans not having the ability to make a mortgage payment or from a foreclosure.
3. VA Loans Are Flexible
The VA permits veterans to buy various properties via an array of financing choices. For instance, veterans possess the choice to purchase a conventional home, condo, manufactured home, to construct a new house, or to improve an existing house with features that are energy efficient.
4. Refinancing Options Available
These are like traditional streamlined refinancing loans obtainable via additional federal housing programs and traditional lenders. Interest Rate Reduction Refinancing Loans are made to assist veteran home buyers in refinancing existing mortgages to gain a lower interest, as well as generate a lower month-to-month mortgage payment.
5. It’s Easier to Qualify for VA loans
VA loans require specific documentation, acceptable credit history, and sufficient income to make your monthly payments. But, as compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guaranty.
The Department of Veterans Affairs genuinely wants to make it easier for you to buy a home or refinance.
VA loans represent the most powerful lending program on the market for the vast majority of military borrowers. VA home loans qualified members should utilize the program for this is your hard-earned benefit.
