It’s hard to find the right way to say thank you to active servicemembers and veterans. These brave men and women sacrifice their time, their safety, and even their lives as they serve and protect our country. The U.S. Department of Veterans Affairs (VA) strives to repay a little of the debt we owe to veterans, active servicemembers, and surviving spouses and family members, by offering VA home loans. Sadly, very few veterans and servicemembers utilize these services.
Obtaining a VA loan is not the demanding process that most people think it is. In fact, it can be easier than trying to get a traditional home loan! If you own or would like to own a home and have worked in the military, here are a few of the benefits that VA loans have to offer.
• Interest Rate Reduction Refinance Loan. If you already have a loan through the VA, you can qualify for an IRRRL. These loans refinance your current VA home loan, giving you lower mortgage rates and monthly payments.
• No Mortgage Insurance (MI). Most home loans require mortgage insurance, but VA loans don’t. You can save significantly by avoiding monthly MI payments.
• 100% financing. VA loans don’t require down payment, meaning you don’t have to spend years saving up cash to buy your home.
• Lower rates. When you apply for a VA loan, the VA backs your mortgage, thus, reducing the risk of your VA home loan. Interest rates are generally much lower than other loans, saving you thousands of dollars in the long run.
• Less stringent credit requirements. There are no minimum credit score requirements to get your loan, although higher scores make you more likely to receive better rates.
• Flexible income ratios. While most lenders require a DTI of 40% or lower, VA loans are more flexible.
• Affordable funding fee. To keep their loans MI free, the VA only charges a small funding fee for every loan. This helps fund the program so future servicemember can enjoy its benefits.
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.
Am I Eligible for a VA Loan?
There are a few things that determine your 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:
• A DD-214
• Report of Separation
• Record of Service
• Statement of Service
• Proof of honorable discharge
Luckily, your benefit never expires. You can still qualify for VA home loans after your service has ended, provided you meet the eligibility requirements.
How Can I Learn More About VA Loans?
It’s hard to find a way to say thank you for your service, so consider your VA home loan a small repayment for what you have already given. If you currently serve, have served in the military, or are the surviving spouse of a fallen hero, you may qualify for a VA home loan.
Thank you for your service!
VA entitlement is used to calculate the minimum down payment needed on VA loans. Talk to your local mortgage lender if you need to restore your VA entitlement for zero down VA financing.