The VA loan process is not difficult, and we will help you along the way.
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VA Loan Benefits Guide
If you are a Veteran, active military or a surviving spouse, you should know that VA loans offer strong mortgage options in the lending market.
No Down Payment - Check your eligibility for a $0 down VA loan. Check your COE (Certificate of Eligibility)
No Private Mortgage Insurance (PMI) - an insurance that protects lenders in case of a borrower default. VA loans don’t require monthly mortgage insurance. Not having PMI allows you to stretch your buying power and save money.
Competitive Interest Rates - The VA loan program has the lowest average fixed rates in the home lending market. VA interest rates are typically 0.5 to 1 percent lower than conventional interest rates saving you money over the life of the loan.
Relaxed Credit Requirements - As a Veteran, you don’t need a perfect credit to secure home financing at competitive interest rates. VA loans are a bit more forgiving when recovering from a bankruptcy, foreclosure, or short sale.
Closing Cost Limits - The VA limits what you can be charged in closing expenses. Some costs and fees must be covered by other parties in the transaction. This makes homeownership more affordable for you as a qualified homebuyer. With a VA loan, you can negotiate with the seller to pay all your loan-related closing costs and up to 4 percent in concessions.
No Down Payment - Check your eligibility for a $0 down VA loan. Check your COE (Certificate of Eligibility)
No Private Mortgage Insurance (PMI) - an insurance that protects lenders in case of a borrower default. VA loans don’t require monthly mortgage insurance. Not having PMI allows you to stretch your buying power and save money.
Competitive Interest Rates - The VA loan program has the lowest average fixed rates in the home lending market. VA interest rates are typically 0.5 to 1 percent lower than conventional interest rates saving you money over the life of the loan.
Relaxed Credit Requirements - As a Veteran, you don’t need a perfect credit to secure home financing at competitive interest rates. VA loans are a bit more forgiving when recovering from a bankruptcy, foreclosure, or short sale.
Closing Cost Limits - The VA limits what you can be charged in closing expenses. Some costs and fees must be covered by other parties in the transaction. This makes homeownership more affordable for you as a qualified homebuyer. With a VA loan, you can negotiate with the seller to pay all your loan-related closing costs and up to 4 percent in concessions.
Lifetime Benefit If you qualify for a VA loan, you may use it more than once during your life. It can help when you’re moving from one part of the country to another or to another home in the same town.
No Prepayment Penalties - payoff your loan early without any extra fees
Foreclosure Avoidance - The VA advocates for Veterans at risk of losing their homes and works with them to help them keep their homes.
The VA Appraisal - The required appraisal verifies the property’s value and condition to protect you, the veteran, and give you peace of mind that your new home is safe and sound.
Income Verification In order to make sure you can comfortably afford your new monthly mortgage payment, we consider salaries, wages, and count the following payments as effective income:
No Prepayment Penalties - payoff your loan early without any extra fees
Foreclosure Avoidance - The VA advocates for Veterans at risk of losing their homes and works with them to help them keep their homes.
The VA Appraisal - The required appraisal verifies the property’s value and condition to protect you, the veteran, and give you peace of mind that your new home is safe and sound.
Income Verification In order to make sure you can comfortably afford your new monthly mortgage payment, we consider salaries, wages, and count the following payments as effective income:
- Basic Allowance for Housing
- Disability Pay
- Retirement Income
VA Loan Options
Veterans can purchase a home with their VA loan benefit, but as a Veteran, you can also make energy-efficient upgrades, take equity out of their home, and refinance into lower interest rates.
1. VA Purchase Loans are the most used financing options by Veterans. Veterans use this type of loan to purchase a primary residence.
2. VA Interest Rate Reduction Refinance Loan (IRRRL) are also referred to as VA Streamline refinance, are an option for Veterans who want to lock into a lower interest rate or refinance out of an adjustable-rate VA loan. This is available for Veterans with active VA loans.
3. VA Cash-Out Refinance is for Veterans who want to take equity out of their home in return for cash. VA loan holders can use this money to pay off debts, make home improvements, or in case of emergency. Veterans can use this to refinance non-VA mortgages.
4. VA Energy Efficient Mortgage (EEM) is an option that Veteran homebuyers have available to potentially reduce the costs of their utilities. Investing in energy-efficient upgrades at the onset of purchasing your home can ultimately lower heating, cooling, and other energy-related expenses in the future. Homeowners may be able to finance qualified energy-efficiency improvements into their loan.
No Loan Limits Veterans with their full VA loan entitlement can borrow as much as they can afford without the need for a down payment. The VA loan limits occur for Veterans with diminished entitlement. When this happens, a Veteran who wants to purchase above where his/her entitlement ends must put down a quarter of the difference between that figure and the home’s purchase price.
Funding Fee Exemptions The VA Funding Fee is a required governmental fee applied to every VA loan. The money goes to the VA to help cover any losses and sustain the VA loan guaranty program. Most Veteran borrowers pay between 2.3% and 3.6% for the funding fee, some Veterans are exempt.
Veterans exempt from paying the funding fee:
Assumability A VA loan assumption is a purchase transaction where the purchaser takes over the seller’s existing mortgage.
Benefits of VA loan assumption include:
Q & A on VA Loan Benefits
What is the best VA loan benefit? For many Veterans the $0 down is the best VA loan benefit.
Are VA loans better than conventional? Typically, VA loans have lower interest rates than conventional loans and require no down payment. VA loans also have no mortgage insurance fees, which can limit your buying power.
Are there any benefits to sellers? The VA doesn’t require sellers to pay for anything on behalf of a VA buyer. The buyer can negotiate the closing costs with the seller.
Have more questions about VA loans, contact us and ask. If we don't know the answer, we will find out and help you.
1. VA Purchase Loans are the most used financing options by Veterans. Veterans use this type of loan to purchase a primary residence.
2. VA Interest Rate Reduction Refinance Loan (IRRRL) are also referred to as VA Streamline refinance, are an option for Veterans who want to lock into a lower interest rate or refinance out of an adjustable-rate VA loan. This is available for Veterans with active VA loans.
3. VA Cash-Out Refinance is for Veterans who want to take equity out of their home in return for cash. VA loan holders can use this money to pay off debts, make home improvements, or in case of emergency. Veterans can use this to refinance non-VA mortgages.
4. VA Energy Efficient Mortgage (EEM) is an option that Veteran homebuyers have available to potentially reduce the costs of their utilities. Investing in energy-efficient upgrades at the onset of purchasing your home can ultimately lower heating, cooling, and other energy-related expenses in the future. Homeowners may be able to finance qualified energy-efficiency improvements into their loan.
No Loan Limits Veterans with their full VA loan entitlement can borrow as much as they can afford without the need for a down payment. The VA loan limits occur for Veterans with diminished entitlement. When this happens, a Veteran who wants to purchase above where his/her entitlement ends must put down a quarter of the difference between that figure and the home’s purchase price.
Funding Fee Exemptions The VA Funding Fee is a required governmental fee applied to every VA loan. The money goes to the VA to help cover any losses and sustain the VA loan guaranty program. Most Veteran borrowers pay between 2.3% and 3.6% for the funding fee, some Veterans are exempt.
Veterans exempt from paying the funding fee:
- Veterans who receive compensation for service-connected disabilities
- Veterans who would receive disability compensation if they didn't receive retirement pay
- Veterans rated as eligible to receive compensation based on a pre-discharge exam or review
- Veterans who can but are not receiving compensation because they're on active duty
- Active duty Purple Heart recipients
- Surviving spouses who are eligible for a VA loan
Assumability A VA loan assumption is a purchase transaction where the purchaser takes over the seller’s existing mortgage.
Benefits of VA loan assumption include:
- Buyers can assume the seller’s interest rate, which is a great selling point if it is lower than current market conditions.
- Most closing costs aren’t included when the loan is assumed
- Non-Veterans can assume the loan, but that does not free up the Veteran’s VA loan entitlement on the property
- Veterans can save their VA loan entitlement if the person assuming the loan is also a qualified Veteran and signs a Substitution of Entitlement.
Q & A on VA Loan Benefits
What is the best VA loan benefit? For many Veterans the $0 down is the best VA loan benefit.
Are VA loans better than conventional? Typically, VA loans have lower interest rates than conventional loans and require no down payment. VA loans also have no mortgage insurance fees, which can limit your buying power.
Are there any benefits to sellers? The VA doesn’t require sellers to pay for anything on behalf of a VA buyer. The buyer can negotiate the closing costs with the seller.
Have more questions about VA loans, contact us and ask. If we don't know the answer, we will find out and help you.
