VA Loan: An option for Veterans
There are all kinds of loan programs out there when you are searching for your perfect house. But did you know that there is a loan that is specific for veterans? That’s right. The VA loan has been around since 1944 and it could be exactly what you are looking for if you qualify and meet the eligibility requirements. So let’s talk a little bit about this particular loan.
What is it?
This is a loan that was created in 1944 by the US Government to help our service members buy a home without the help of a down payment or a great credit score. The loans are issued by private lenders.
Who is eligible?
Not just veterans. This also extends to active duty service members, select military spouses, National Guard members and reservists. The Department of Veterans Affairs must ultimately approve eligibility.
You may be eligible if you meet at least one of the following
-You have served 90 consecutive days of active service during wartime.
-You have served 181 days of active service during peacetime.
-You have more than 6 years of service in the National Guard or Reserves.
-You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
Advantages over a traditional mortgage
There are a few things that make the VA loan stand out over a traditional mortgage. First, no down payment for a VA loan and up to 20% down payment for a traditional loan. Also, you are not required to have PMI (Private Mortgage Insurance) with a VA loan, as opposed to a traditional loan, which is likely that you would need it. It is easier to qualify for a VA loan, while there are more strict guidelines for a traditional mortgage. And finally, lenders have more flexibility to meet competitive interest rates with VA loans. Without government backing on the traditional loan, lenders are taking more of a risk when trying to have competitive rates.
What do you do now?
Much like the normal home-buying process, you still want to get pre-approved by a lender to see what you can afford. And you still want to have the right real estate agent. Not everyone knows the ins and outs of the VA loan. Make sure you find someone that does so you get the best service for your money. You certainly deserve it.
Thank you for your service.