What Is a VA Loan?
A VA Loan is Designed to offer long-term financing to veterans. VA mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Veterans Administration. The VA determines eligibility and issues a certificate to qualifying applicants to submit to their mortgage lender of choice. VA loans require a minimum amount of service and the veteran to have been discharged under any circumstance except dishonorable. Dishonorable discharges omit a veteran from qualifying for this benefit
How Do I Qualify For a VA Loan?
To qualify for this loan you must meet the following criteria:
- You have served 90 consecutive days of active service during wartime,OR
- You have served 181 days of active service during peacetime,OR
- You have more than 6 years of service in the National Guard or Reserves,OR
- 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.
- To have been honorably discharge from the military.
If you meet this criteria it’s important to choose a qualified lender that specializes in this field.
Misconceptions About VA Loans
There are a lot of misconceptions about VA loans that cause issues when people apply. One of the most common is that people think the VA is the institution that loans the money. In fact the VA is the only guaranteeing the money, the mortgage lender is the one actually issuing the money.
Because a VA mortgage has no mortgage insurance requirement and also no down payment requirement they are a higher risk for lenders, to minimize this risk the VA guarantees a percentage of the money. This means if the Veteran fails to make payments the mortgage company can still recoup some of it’s money from this VA guarantee.
Another common myth is that VA loans have no closing costs. A veteran should know that closing costs are charged by the lender, not the VA. This means that even if a lender is VA certified, they can still charge their normal closing costs. The VA does have a requirement for how much a lender can charge. If a veteran is on disability from the VA they are omitted the VA funding fee. This is the fee paid to the VA for guaranteeing their loans to lenders.
What Are The Benefits Of a VA Loan?
These loans contain no down payment, something that only a USDA Loan and a Wheda No Down Payment Loan can do. With no down payment they are also able to omit mortgage insurance, they contain the same debt to income structure as FHA loans; which means borrowers can afford more homes at a lower price. When you have no mortgage insurance and higher debt to income calculations you find that the Veterans monthly payment is much lower.
What Can You Buy With a VA Loan?
Just like their conventional and FHA counterparts, you are able to purchase a 1-4 family residential homestead. You must owner occupy the property as VA loans are not for non owner-occupied investment purchase. The rates are the same on two, three or four unit properties as they are on single family residencies, which make using a VA loan to purchase investment real estate very appealing.
Can You Pay a VA Mortgage Off Early?
Yes, the VA has no pre-payment penalties for paying off the mortgage early.
VA Mortgages Come In What Terms?
You can get a VA mortgage in the standard 10,15,20,25 or 30 year terms. But we are also able to variations in that terms like 11, 13, 14 years etc.
How Do I Apply For a VA Mortgage?
To apply you should consult an experienced professional, you can do so here. If you have general questions, feel free to ask a professional. Or you can call me directly.
Justin Scott
NMLS 878581
(920) 530-4484
909 E. Walnut Street
Green Bay WI
54301
