VA Home Loan

The U.S. Department of Veterans Affairs (VA) strives to make homeownership affordable for active servicemembers, Veterans, and eligible surviving spouses with the VA home loan guaranty. According to VA home loan data, about 3% of VA home loans were issued in Colorado, and less than 12% of Texas Veterans took advantage of the VA loan benefits for home purchases. To increase the number of funded VA loans for homes, approved VA lenders must provide Veterans with information about VA loan requirements and benefits. 

How Does a VA Home Loan Work?

One of the advantages of the Servicemen’s Readjustment Act is the VA Home Loan Guaranty that assists eligible VA loan applicants with well-earned benefits. Although the VA does not directly lend money for VA home loans, it allows mortgage lenders the ability to offer favorable VA loan terms; and the loan process is simple. The VA loan process starts with a mortgage loan application. In addition to the VA loan application, you will need to provide proof of military service. It is helpful to have your DD-214 form available. Our in-house VA loan processor can assist with VA loan documents.  

With a complete mortgage loan application and proof of VA eligibility, you can begin to discuss the VA loan options with your mortgage lender. VA loans have lenient qualification requirements because a portion of the loan is guaranteed by the VA’s funding fee. Funding fees are much more affordable than other options. The exact amount depends on the type of loan, the borrowers service type, and down payment. The fee may be waived entirely based on VA disability, or for qualifying surviving spouses. Talk to our loan officer about discounted or waived VA funding fee eligibility.  

What Are VA Loan Benefits?

• No Down Payment: With sufficient entitlement and the minimum VA loan qualifications, a VA loan will cover 100% of the purchase price of your home. 
• No Mortgage Insurance (MI). Most home loans require mortgage insurance, but VA loans do not. You can save significantly by avoiding monthly MI payments.
• Lower VA Rates: When you apply for a VA loan, the VA guarantees your mortgage, thus, reducing the risk to VA mortgage lenders. VA loan interest rates are generally much lower than Conventional loans. Wholesale VA rates from Competitive Home Lending will save you even more money. Talk to Us about closing costs incentives. 
• Lenient Credit Requirements: There are no minimum credit score requirements to get a VA loan. However, higher scores make you more likely to receive a better VA rate. It is important to note that VA lenders could add credit score overlays requiring certain credit scores. Mortgage brokers such as Competitive Home Lending can direct VA homebuyers with less-than-perfect credit to the appropriate VA lenders. 
• Flexible Income Ratios: While most lenders require a DTI of 50% or lower, VA loans are more flexible.
• No Maximum Loan Amount: Although the VA does not have a maximum VA loan amount, some VA lenders will cap VA loan amounts. 
• Affordable Funding Fee: To keep VA loans MI free, the VA charges a small funding fee for every loan. This helps fund the program so future servicemembers can enjoy its benefits.
• Interest Rate Reduction Refinance Loan (IRRRL): If you already have a VA loan, you can qualify for an IRRRL. This is a streamlined refinance of your current VA home loan that gives you a lower mortgage rate and monthly payment.

VA Loan Eligibility

There are a few things that determine your VA eligibility:

• Length of Service/Service Commitment
• Duty Status (active duty/retiree-discharged)
• Character of Service

You will also need a Certificate of Eligibility (COE), which can be easily accessed online in minutes. Obtaining your COE is easy and it doesn't require dozens of pieces of identification. In fact, depending on your type of service you may only need one of the following:

• Form DD-214
• Report of Separation
• Record of Service
• Statement of Service
• Proof of Honorable Discharge

Luckily, your VA loan eligibility benefit never expires. You can still qualify for VA home loans after your service has ended, provided you meet the eligibility requirements.

Learn More About VA Loans

If you are a qualified VA home loan applicant, talk to our local mortgage broker about the benefits of a VA home loan. Competitive Home Lending works with the nation’s best VA lenders to offer Veterans wholesale mortgage rates, making homeownership even more affordable. It’s our way of thanking you for your service. If you have questions about VA mortgage loans, VA loan qualification, VA loan eligibility, VA loan benefits, or the VA loan process, Contact Us. If you are ready to start your VA loan, Apply Online for exclusive wholesale pricing.