Guide to VA Loans
Millions of Americans are eligible for home financing with a VA home loan. If you’ve served, or are currently serving, in the U.S. Army, Navy, Marine Corps, Air Force or Coast Guard, your nation thanks you by offering a myriad of veterans’ benefits, one of which is a VA loan which provides access to government-sponsored mortgages for purchasing homes or refinancing existing loans.
What Is a VA Loan?
A Veterans Affairs (VA) loan is a home financing loan backed by the Department of Veterans Affairs for eligible veterans, active military members, surviving spouses, and other applicants to use when purchasing a new home or refinancing an existing mortgage.
How to Qualify for a VA Loan
Basic requirements to qualify for a VA loan include:
- Meeting the minimum qualifications for credit and income that private lenders require.
- Holding a legitimate Certificate of Eligibility (COE) as the result of your service.
- Being the unmarried surviving spouse of a veteran who died, is missing in action, or who is a prisoner of war.
- Being the surviving spouse of a completely disabled veteran.
- Paying your previous VA loan in full or another veteran purchaser agrees to assume the responsibility for the remainder of the loan.
VA Loans Benefits
As long as the applicant meets the terms of the VA loan, it remains one of the most economical financing arrangements available in the real estate market today. Here are some of the benefits of a VA home loan:
- No down payment – VA loans do not typically require you to provide a down payment, unlike traditional loans that can require a minimum down payment of up to 20%.
- Lower interest rates – While interest rates on VA loans fluctuate with market conditions, they average among the lowest of any type of mortgage loan—typically a quarter of a percent lower than conventional interest rates.
- No prepayment penalties – With a VA loan, you are free to pay your loan off early with no financial penalty.
- Loan program versatility – In addition to purchasing a home or condominium in an approved location, veterans can use the loan program to build new homes, improve pre-existing homes with energy-efficient renovations, or purchase pre-built homes
- Foreclosure avoidance advocacy – The VA loan program provides VA staff members who advocate on behalf of homeowners to find alternatives to foreclosure.
- Potential help with closing costs – Sellers can pay all of a buyer’s loan-related closing costs and up to 4% in concessions, which is typically negotiated at the time of contract signing.
- No private mortgage insurance – For traditional loans, where the down payment is less than 20%, the lender requires the borrower to purchase private mortgage insurance (PMI)—a monthly fee over and above your principal and interest payment. No monthly PMI is required for a VA home loan. Also, if the veteran is disabled, the up-front VA funding fee is completely waived.
Your Central Florida VA Loan Experts
If you have questions about your VA loan eligibility, speak with one of the VA loans specialists at Butler Mortgage.
Whether you’re looking for a VA loan for your first home, or you’re using your loan entitlement to purchase another home, our team of loan professionals will guide you through the optimal mortgage options for your finances. We also offer a free, VA loan pre-qualification screening for veterans.
For more information or to see if you pre-qualify for a VA loan, call Butler Mortgage today at 407-931-3800.