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Here’s What You Need to Know About VA Loans

 

Veterans Day, originally called Armistice Day, commemorated the end of World War I. While the war officially ended on June 28, 1919, fighting ended approximately seven months before that when the Allies and Germany put an armistice into effect on the eleventh hour of the eleventh day of the eleventh month. Because of this, November 11 is observed annually as Veterans Day in the United States and honors all those who have served the country both in war and in peace.  

The men and women who commit to serve and protect our country are as diverse as America itself. All genders and ethnicities from a variety of economic backgrounds have enlisted in one of the five branches of military. Last year, it was estimated that 18.2 million living veterans have served in at least one war, leaving their friends and family to risk their lives in combat.  

In 1944, the VA home loan program was created as part of the GI Bill of Rights, legislation designed to level the playing field for those who served in World War II. It was signed into law by President Franklin D. Roosevelt and has changed the lives of countless men and women serving in the military who dream of becoming homeowners. Originally, this loan program was only available to veterans who served on active duty during specified periods. That changed with the enactment of the Veterans Home Loan Program Amendments of 1992, which expanded benefits to Reservists and National Guard personnel who have served honorably for at least six years. Since its inception, more than 18 million VA home loans have been insured by the government. 

Everything You Need to Know

As briefly discussed above, a VA loan is a mortgage that is partially backed by the Department of Veterans Affairs. One of the many benefits of this type of loan is that they consistently offer lower rates compared to traditional financing. Keep in mind that you are only able to utilize a VA loan for your primary residence, not investment properties or vacation homes. The biggest attraction of a VA loan is how much easier it is to get financing if you have a lower credit score. It also offers an option for 0% down payment and more lenient income requirements compared to a conventional mortgage.  

Who’s Eligible 

Most members of the Army, Air Force, Navy, Marine Corps, and Coast Guard are eligible to apply. Others who qualify include veterans, reservists, National Guard, and spouses of military members who died while on active duty or as a result of a service-connected disability.  

Active-duty military personal are usually able to apply for VA loan benefits after six months of service. Reservists and those in the National Guard need to wait six years to apply unless they are called on active duty before that, in which case they are eligible after 181 days of service.  

How to Apply  

The first thing you’re going to want to do when buying a home through the VA Program is to find a participating lender. You also need to get pre-qualified to determine how big of a loan you can afford just as you would with a standard mortgage. Next, you’ll need to obtain a Certificate of Eligibility which verifies that you meet all the requirements for a VA loan. You’ll then work with a real estate agent to help you find a home and negotiate a purchase agreement. They will also ensure that both your purchase and sales agreement contain a “VA Option Clause” as well as an option to escape from the contract if, for some reason, you can’t get a VA loan.  

Once you have your lender and mortgage program in place, you’ll apply for your VA loan. Your lender will work with you to gather all the necessary documents and order a VA appraisal. Once everything has been approved, all that’s left to do is move into your new home.   

The Benefits of A VA Loan 

There are numerous benefits to a VA loan compared to FHA and conventional loans. This includes no down payment, no mortgage insurance, and the confidence that comes with the federal government guaranteeing that a portion of the loan will be repaid to the lender even if you can’t make your monthly payments. Because of this guarantee, VA loans are more flexible and easier to qualify for.  

With a VA loan, you can have a fixed or adjustable-rate mortgage and it can be used to buy a house, condo, new construction, manufactured home, or duplex. You can also use a VA loan to refinance your existing mortgage or make repairs to your current home.  

Closing costs for a VA loan are usually lower and, unlike many other programs, a VA loan will not restrict your right to sell your home with prepayment penalties or early-exit fees. There are no restrictions regarding refinancing. 

We Can Help 

The mortgage process can be difficult enough and adding the VA loan process may seem overwhelming. However, finding a lender that is familiar with the basics and can help you navigate the process effectively can make all the difference. Silverton Mortgage is proud to offer VA Loan programs to all who qualify. Our experienced loan originators are prepared to answer all your questions to see if a VA loan is right for you. We appreciate all who have made the decision to serve this country and are honored to help our veterans find the right mortgage to fit their needs in conjunction with all the benefits available to them through the VA loan program. Contact us today and see how we can help you discover the American dream of homeownership.