It’s somewhat easier to qualify for a home loan if you’re a veteran. It’s relatively easier, for instance, to get a Veterans Affairs (VA) mortgage or loan. Unlike conventional mortgages, it’s an option widely available to over 22 million veterans and active military members. Note that the VA loan is made through a private lender, not through the U.S. Department of Veterans Affairs. If you think you’re eligible as a veteran, here are some things you need to know about the VA home loan program.
Minimum Requirements to Qualify
Any of these four are qualified for a VA loan: veterans, active military members, some surviving spouses and National Guard members.
As a veteran, you only need to look for a mortgage lender that participates in the program and apply for a VA loan. Lenders usually demand a copy of your Certificate of Eligibility or get it on your behalf.
If you don’t have a Certificate of Eligibility yet, check out the requirements on the Veterans Affairs website and apply for one.
Besides the certificate, you should also have a sufficient income and an acceptable credit rating to qualify. And don’t forget that homes purchased with the VA loan are for your own personal occupancy only. Once eligible, you can proceed with the home buying process. Find a lender, choose a home and close on the loan.
Benefits of a VA Loan
VA loans are not only more accessible than conventional loans. They also offer a host of benefits, from reasonable interest rate to comprehensive assistance. Apply for a VA loan to see you qualify for the excellent benefits they provide. Here are some advantages to expect:
- You don’t need a down payment unless the lender requires it *or* the purchase price exceeds the property’s reasonable value. This zero down payment scheme can save you up to 20 percent of the loan value as compared to a conventional home loan.
- You are apprised of the property’s reasonable value so that you can make a well-informed decision as a buyer.
- You can negotiate the interest rate and pay no mortgage insurance premiums. You can also get a lower interest rate through the “Streamline Refinance Loan.”
- You can get qualified even without an outstanding credit score. The program usually considers only the previous 12 months of your credit history. It factors in bankruptcy or any collections situation though.
- You can prepay without having to pay any penalty.
- The VA can assist you in case you default on the loan.
VA loans can be used for purposes other than buying or building a new home. They can be used for refinancing an existing mortgage and fixing or improving a current home. It makes sense to apply for one considering all the benefits it offers. Make a smart move by using these tips:
- If you plan to stay home for a short time, get an adjustable rate mortgage to keep the costs low. But if you want to settle down and have an extra disposable income, you can save money on a 15-year fixed term loan.
- Private lenders will use your credit report to decide on your eligibility and interest rate. Be sure to get a free copy of your report at www.annualcreditreport.com and check it thoroughly for any errors. Don’t forget to check your credit score as well.
- Get pre-approved on your home loan to get an accurate idea of how much you can afford. This will save you from a great deal of stress, time and money.