As a veteran, you know VA loans are a great way to get your finances in order. But did you know there are other types of loans available? Here’s everything we found out about Veteran loans:
You can get a loan without putting down any money. The VA does not require a down payment, so you don’t have to pay for the house before getting it. This is great news for those who want to buy a house and don’t want to put up as much cash up front.
This would mean more interest charges on your monthly payments. Still, it doesn’t matter because if you default on the loan (for whatever reason), then your lender can take back almost everything they lent out at no additional cost!
When buying a home, closing costs are one of the biggest expenses. Closing costs can be anything from title insurance fees to real estate taxes and even the cost of your lawyer’s services. The seller may also pay for some or all of these expenses if willing to take on this liability.
The amount sellers are allowed to pay by the state typically ranges from 2% – 4% of the purchase price, although it could be as high as 5%. If your lender offers an interest-only loan with no principal required at closing, you’ll only need about 1% in cash upfront (or even less if you have excellent credit).
If you’re a veteran, that’s great! But if you don’t have a home to buy, the VA loan can be used to help finance the purchase of an existing property.
The VA loan isn’t limited to first-time home buyers—you can use it for your primary residence, second home, or investment property. You may even want to use it on your manufactured home!
You can get a mortgage with a low credit score. The VA will not use your credit score to determine eligibility, but it requires you to have at least 620 on the FICO Score. This is an option if you need an excellent score and are looking to buy a house!
The VA loan also doesn’t require down payments or first-time buyer status (although many lenders do). They only require that you own the property outright (not just rent) and don’t owe any money on it—and if that sounds like too much work for someone who’s just moved out of their parents’ basement… they’re right! But there’s one thing we’ve learned from our years of experience working with military families: just because something seems impossible doesn’t mean it isn’t possible after all!
Your spouse’s eligibility is transferable, so if you get divorced or separated and want to move on with your life and start a new chapter, there’s no reason why you can’t apply for the loan. The VA will accept the spouse’s original application even though it was received after separation or divorce.
The only thing that needs to be done is to fill out the required paperwork from the Financial Aid Office at their new address (if applicable), along with proof of residency requirements in their new state/city/county, etc., then send everything back in!
The VA loan can be used for refinancing and/or renovations.
- Refinancing: If you’re planning on selling your current home and buying a new one, this is an option that will let you reduce your monthly payments.
- Renovations: If your home needs more than minor repairs, this may be the best way to improve its value without spending tons of money on renovation projects.
- Home Improvements: Whether adding an extra room or making other improvements like painting walls or replacing carpeting, these are all things that could add value to your property by increasing its resale value at auction time (or, in some cases, even selling it outright).
There’s no mortgage insurance, appraisal fees, or title insurance on a VA loan. This means you can save money on closing costs by not paying for these things upfront. If you’re looking to buy your first house and need help with the down payment, consider getting a VA loan instead of a conventional loan from a bank or credit union.
The biggest benefit of a VA loan is that it doesn’t require monthly mortgage insurance. Other types of loans do, so if you’ve been looking into other options, this might be the one that’s right for you!
The VA streamlines the homebuying process by getting rid of the middlemen. Instead of going through a bank, a lender, and an insurance company, the borrower is responsible for taking out the loan, making payments to the lender, and paying the VA home loan insurance premium directly to the government. This eliminates unnecessary fees and makes the home buying process much more simple.
With no monthly mortgage insurance premiums and no funding fee required, getting a VA loan can be an excellent option for people looking to purchase or refinance a home. The government backs these loans, so they are guaranteed by a greater power than any other type of mortgage.
If the veteran who took out the loan dies, the loan can be assumed by another veteran. The person taking over must meet all of the same criteria as the original borrower and will have to file for a VA Loan with them.
If you’re interested in taking over your spouse’s VA Loan but don’t have enough income to make payments on their own, you can find a way around this requirement by claiming it as yours. If so, there are some additional requirements:
- You must have received an Honorable Discharge from Active Duty after completing at least 6 years of service;
- Your spouse cannot currently owe more than $10K towards their current mortgage payment(s).
If you have any questions about VA loans, contact us today. Our mortgage specialists are here to help you get started on your journey to homeownership.