VA loans, guaranteed by the Veterans Administration, is the preferred loan program for families of active duty military members and veterans of the armed forces. Undoubtingly, one of the main reasons for its popularity is due to its 100% financing without the need of costly mortgage insurance, unlike other loan programs. Many times, veterans are able to buy a home with VA loans and literally not pay a dime out of pocket.
We will discuss what role the VA plays in VA loans, the benefits of VA loans, who is eligible for VA loans, and the documentation needed when qualifying for VA loans.
Did you know that more than 27 million veterans and service personnel are eligible for VA loans, yet most aren’t even aware it is possible for them to utilize their VA benefits more than once?
The VA Guaranty
The VA (Veterans Administration) itself does not actually offer VA loans nor are they the entity that is really lending the money directly. Another common misconception is that eligible veterans are guaranteed to qualify for VA loans by the VA guaranty. The guaranty is actually to the lender and it ensures that if the veteran should default, the VA will pay the lender a percentage of the loan balance.
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Benefits of VA Loans:
- 100% financing
- No monthly mortgage insurance
- There are limitations on closing cost paid by a veteran
- VA Loans are assumable, subject to VA approval of the assumer’s credit
- Fixed rate options for both 30 and 15 years
- The seller can pay up to 4% of the veterans closing costs and even pay down your debt to help lower your debt-to-income ratio
- Flexible debt-to-income ratios
- Less than perfect credit accepted – FICO scores as low as 500 accepted
- Incredibly low mortgage rates
Who is Eligible for a VA Home Loan?
Veterans with active duty service, that was not dishonorable, during World War II and later periods, are eligible for VA loan benefits. World War II (September 16, 1940 to July 25, 1947), Korean conflict (June 27, 1950 to January 31, 1955), and Vietnam era (August 5, 1964 to May 7, 1975) veterans must have at least 90 days of service.
Veterans with service only during peacetime periods and active duty military personnel must have had more than 180 days of active service. Veterans of enlisted service which began after September 7, 1980, or officers with service beginning after October 16,1981, must in most cases have served at least 2 years.
VA Documentation Needed:
The three specific pieces of documentation a lender will need to determine your eligibility is a DD214 for discharged veterans, a statement of service for active military personnel, and a certificate of eligibility (COE) to determine you have VA entitlement. Don’t know where, or how, to get your certificate of eligibility? That is ok. We are here to help. Contact us and we will walk you through the process and even help you get your COE.
Have questions? Ready to start the VA loan process? Simply give us a call at 727-488-7355 or apply online today.
Frequently Asked Questions:
Standard Form 180, Request Pertaining to Military Records, is used to apply for proof of military service regardless of whether you served on regular active duty or in the selected reserves. This request form is NOT processed by VA.
Rather, Standard Form 180 is completed and mailed to the appropriate custodian of military service records. Instructions are provided on the reverse of the form to assist in determining the correct forwarding address.
Updated on 2021-08-30T12:23:13-04:00, by .