VA home loan is provided to veterans of U.S. military services. If you serve in the army, marine corps, navy or air force, then this loan helps you buy a home without a down payment. This loan also helps in repairing your home or refinancing your mortgage. In this blog, we will try to deliver the complete VA loan program guide and solutions.
Who Is Eligible To Apply For A VA Loan?
The following are eligible to apply for a VA loan:
- The borrower should have served the military services for 90 days in wartime or 181 days in peacetime.
- The surviving spouse of the service person can also avail of this loan.
- Veterans who got injured or lost their body parts can also apply for this loan.
- If you were discharged from military service because of malice, you are considered ineligible for the VA loan.
Benefits Of The VA Loan Program
Following are the benefits of getting a VA loan:
- VA loan does not require a down payment.
- For applying for a VA loan, you do not need a minimum credit score.
- You are not required to pay Private Mortgage Insurance (PMI), which is insurance that helps you buy loans.
Seven Steps Toward Getting The Best Possible Rate
Veteran Affairs (VA) does not mean that the government lends you the mortgage. The government only partners with the lenders.
These lenders have different rates of interest. The interest rates vary between 4-5%, and the term to pay the money is 15-30 years.
Here are the steps to follow to get the VA loan at the best rate:
Unlike other kinds of loans, VA loans have more diverse rates. Usually, the rates fall between 4-5%.
VA loans have the minimum credit score, but it does not entirely abandon the credit score. A good credit score can earn you perfect rates.
A Loan Expert
Find a loan expert or real estate agent with a vast practical knowledge of properties and interest rates. An expert would recommend the best interest rate lenders to buy a particular property.
VA Funding Fee
If not a down payment, a borrower has to take care of various costs like loan origination fees, application fees, real estate taxes and other expenses. You have to pay the VA funding fee, which is to be paid once. It can be 3.6% of your loan amount.
Choose The Type Of Loan
There are four programs of VA loans that will decide the interest rate you will pay; Cash out refinance, Interest Rate Reduction Refinance Loan (IRRRL), Energy Efficient Mortgage and Native American Direct Loan. Each program decides the rate you will have to pay.
Clear your debts before applying for the VA loan, as the lenders will see you’re returning the mortgage payment capacity.
Choose Your Term
Choose 30 years to pay the loan instead of 15 years if you want to spend the least every month.
On a Final Note
Before you proceed, you should first check the Criteria of Eligibility (COE) for the loan, which the U.S. Department of Veterans Affairs issues. Though COE is not mandatory in the process, it makes acquiring the VA loan way easier.