VA loans are home loans provided by private lenders and backed by the United States Department of Veterans Affairs to help active service members, veterans and eligible surviving spouses purchase homes. Because these loans are guaranteed by the VA, lenders are able to provide qualified homebuyers with higher mortgages — sometimes up to 100% of the home’s cost — and lower interest rates, making homeownership more attainable.
HUNT Mortgage is here to help you understand the benefits of a VA loan, determine if you qualify and help you apply so you can be approved for the financing you need.
To qualify for a VA loan, you must meet the following requirements:
- Be currently active duty, a veteran who was honorably discharged, or the spouse of a service member who died in active duty or due to a service-related illness or injury
- Have actively served for at least 90 consecutive days during wartime or 181 consecutive days during peacetime, or for 6 years in the National Guard or Reserves
- The home you are looking to finance must be used as your primary home — investment properties or vacation homes won’t qualify
Those who meet these requirements will then need to obtain a Certificate of Eligibility, or a COE, from the VA.
Benefits of VA loans include:
NO DOWN PAYMENT REQUIRED
Because of the confidence that a VA-backed loan can give lenders, you might be able to receive financing for 100% of the home’s cost, eliminating the need to make a down payment.
All VA loans come with an entitlement, which is the amount that the VA will provide a lender in the case that you default on the mortgage. A standard entitlement (based on a loan of $144,000 or less) will be either $36,000 or 25% of your loan amount, whichever is the cheapest. Bonus entitlements are also available for homes that cost more than $144,000. Often, lenders are willing to offer up to four times the amount of your entitlement, which equals 100% of the home’s cost.
NO PRIVATE MORTGAGE INSURANCE
Unlike conventional loans, which require private mortgage insurance (PMI) if you are putting less than 20% down, VA loans do not require PMI because your entitlement will amount to more than 20% of the home’s price. However, keep in mind that you will have to pay a VA funding fee, the amount of which depends on the size of your down payment and whether or not this is your first VA loan.
ABILITY TO REFINANCE
VA loans also allow for refinancing. Using an interest rate reduction refinance loan (IRRRL), the VA can help you replace your current loan with a new one at a lower interest rate.
Let us help you secure your VA home loan.
Wondering if you qualify for a VA loan? Our Mortgage Consultants are here to help. We’ll help you gather the documentation you need to obtain your Certificate of Eligibility and get approved for a loan that allows you to become a homeowner. Contact us today or request a quote to get started.
**HUNT Mortgage is not affiliated with or acting on behalf of or at the direction of FHA, VA, USDA or the Federal Government.