If you’re putting your life on the line for your country, the least your country can do is give you something back. That’s where the VA Home Loan comes in. The VA home loan has helped over 20 million veterans achieve the status of a homeowner, whether they had previously owned a home or not. There are many benefits of VA loan vs conventional loans. The program is run and overseen by the United States Department of Veterans Affairs and the loans are provided by private lenders. The VA guarantees part of the loan, which in turn, prompts the lender to give veterans a more favorable offer. The home loan guaranty benefit also extends past buying a home — you can use it to build, repair, keep, or adapt a home. So what do you need to know about the VA loan program?
Who Is Eligible and What are the Benefits of VA Loans?
In 2016, over 700,000 home loans were guaranteed by the VA all over the country. In 2015, over 130,000 home loans helped veterans become first time homebuyers and almost 200,000 home loans helped veterans who were previous homebuyers.
If you’ve served 181 days during peacetime, 90 days during wartime, or spent six years in the Reserves or the National Guard, you’re eligible to qualify for a VA loan. If you were married to a service member who was killed while in the line of duty, you may also qualify. For many of these —
especially purchase or cash out refinance loans — you need acceptable credit, enough income to meet the monthly financial expectations, and a Certificate of Eligibility.
The VA sponsors more than just these two types of loans, however. They also offer the Interest Rate Reduction Refinance Loan, the Native American Direct Loan, Adapted Housing Grants, and some states may offer other resources like property tax reductions.
The IRRRL refinances your current VA loan, thereby giving you a lower interest rate. The NADL program assists Native American veterans finance, buy, build, or improve homes that are on Federal Trust Land or decrease the interest rate on a VA loan. The adapted housing grants help veterans to purchase a home that can accommodate their disability, build a new adapted home, or modify a current home to meet their needs.
What is the VA Loan Application Process?
You’ll need to apply for a Certificate of Eligibility to get the ball rolling on any of these program.s. It shows the lender that you are indeed eligible for a loan that’s guaranteed by the VA. You’ll also need to get your credit in order and have a way to show that you can your monthly expenses comfortably, even with the cost of the loan added. You can apply for this online using eBenefits, through the lender, or by mail, using the form VA-26-1880.
If you’re a veteran, you’ll also need the DD Form 214. If you’re an active servicemember, you need a statement of service, signed by your higher-ups. These should be submitted and then you need to wait for approval.
What Are the Benefits of VA Loan Closing Costs?
There are many benefits of VA loan closing costs versus traditional closing costs. Among these benefits of VA loan closing costs, include that the veteran has a limited type of closing costs that he or she has to pay. This saves him or her money when they get to the closing table. In some cases, it’s possible to not have to pay anything out of pocket. There’s a degree of flexibility when it comes to VA loan closing costs in that there are many different parties who can pay the closing costs, but it doesn’t necessarily have to be the buyer.
The VA loan offers many advantages to veterans who seek to make a life for themselves after retiring from active duty. From the benefits of VA loan closing costs to better loan and interest rates, VA loans provide the opportunity for a new start.