VA Home Loans
Since its launch in 1944, the Veterans Affairs (VA) home loan program has been the leading mortgage program in the country for military veterans, service members, and their spouses. While it can require jumping through a few hoops in order to determine your eligibility for the program, the benefits are well worth it. If you qualify for a VA loan, you'll enjoy generous lending amounts, competitive interest rates, and the ability to buy a house with no money down.
Zero Down VA Home Loans
To purchase a home a veteran can buy a home with ZERO down as the down payment, which is one of the biggest perks of a VA home mortgage loan.
The Perks of a VA Home Loan
The VA home loan program comes with a number of built-in perks, with one of the top worth mentioning being the ability to buy a house without putting any money down. That rivals the likes of a USDA home loan, but it gets better. The VA home loan program is considered one of the best around, thanks to additional advantages--like the fact that you won't have to pay for Private Mortgage Insurance (PMI) even if you put $0 down.
With other loan programs, any borrower that puts down less than 20% will have to pay Private Mortgage Insurance until they reach a 80% loan-to-value ratio (i.e., have paid enough towards their home to makeup for the lack of down payment). This can really add up and it tacks onto your monthly mortgage payment cost, too. The reason why you won't need it with a VA home loan is that these loans are backed by the government, minimizing lender risk.
Plus, the fact that the VA is guaranteeing the loan for the lender means that they are more likely going to offer you a competitive interest rate, even with a higher debt-to-income ratio or lower credit score. Likewise, the guarantee makes it easier to qualify for a mortgage, even if you might not qualify without the VA backing your loan. For all of these reasons, it's worth seeing if you qualify for a VA home loan.
Who Qualifies For A Va Home Loans?
You must meet one or more of the following conditions in order to qualify for a VA home loan. The qualification requirements are as follows.
- You must have served for 90 consecutive days of active service during wartime.
- You must have served 181 days of active service during peacetime.
- You must have served at least six years in the National Guard or Reserves.
- You must be the spouse of a service member who died in the line of duty or died as a result of a service-related disability.
If you meet one or more of these requirements, you may be able to get a VA mortgage for yourself. This criteria would also qualify you for the VA loan refinance program, which has similar perks that you won't find under any other plan or program.
Is a VA Home Loan right for you?
As always, when choosing a mortgage, you need to look at a few different factors. Interest rate is a big one, because even a small change in interest rate can mean thousands of dollars over the life of a loan. Determining the VA mortgage rates will depend on your own unique qualifications.
Again, your credit score and overall risk will influence the interest rate you must pay, but having the VA backing your loan helps take risk off the lender. THat's because going through the VA program means security for the bank that funds your loan. The VA is basically saying to them that, if the borrower defaults, they'll cover any loss that the bank would otherwise be covering themselves.
So, when searching for a VA mortgage, you need to shop around and compare lenders. Don't just go with the first offer you receive because it may end up costing you more. Always look for the best interest rate on your loan so that you don't spend more money than you have to. Also, keep in mind that lenders and title companies charge fees that are typically negotiable. However, the small VA funding fee is not as this fee goes directly to the VA program to keep it running.
How much can you qualify for?
Ultimately, if you choose the VA home loan program, figuring out how much you qualify for is all about the numbers. You need to think about how much you make, how much you spend, and how good your credit score is. These are the same factors that would determine how much anyone can borrow, regardless of the program you are going through.
Additionally, the VA mortgage program also sets overall limits that cap the amount anyone can spend on a home. These limits are more generous than some other programs (like the FHA program), with the limit in 2019 being $484,350. That is with no money down in most counties across the country. In a particularly high-cost area, the limit usually increases substantially, but how much you can borrow will still be based on how much you make and spend each month (called your "debt-to-income" ratio) and your lending profile (which is expressed through your credit score).
Find the Perfect Mortgage
For those who qualify, the VA home loan program may very well be the best option on the market. With no need for a down payment, high loan limits, no PMI requirements, and countless other advantages, buying a home through the VA mortgage program will certainly help you stretch your dollars as far as possible while preserving savings and even scoring a better interest rate than through some other programs.
It all begins with a preapproval and you can then go on to search for a single-family home, condo, manufactured/modular home, multi-unit property, or even a new build through the program. This means exceptional flexibility that rivals even conventional loans, and it's another factor that attracts people to the program. The first step is finding out if you're eligible.
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