VA Loans

VA Loans 2018-02-27T14:56:57+00:00

VA loans are provided by private lenders such as banks or mortgage companies and are guaranteed by the U.S. Department of Veteran Affairs. VA loans are available to veterans, active service members, and qualifying surviving spouses for the purchase of a home.

In most cases, no down payment is required on a VA loan. Sellers also have the option to contribute up to 4% of the purchase price towards the buyer’s closing costs, which may allow the veteran, active service members, or qualifying surviving spouse to purchase a home with little to no money needed at closing.

Veterans, active service members, and qualifying surviving spouses can apply for a VA loan with any mortgage lender that participates in the VA home loan program.

Other benefits of a VA loan include:

  • Closing costs are comparable to other financing types.
  • No monthly private mortgage insurance is required.
  • Right to prepay loan without penalties.
  • Mortgage can be assumed by the buyer when a home is sold.
  • Counseling and assistance are available to borrowers having financial difficulty making loan payments or are facing default on their loan.

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to the lender against borrower default on a mortgage. The fee may be paid in cash by the buyer, seller, or it may be financed into the loan amount.

VA Loan Options

Purchase Loans: Helps qualifying borrowers to purchase a home at a competitive interest rate, often without requiring a down payment or private mortgage insurance.

Cash Out Refinance Loans: Allows qualifying borrowers to take a cash loan out against the equity in the home. These funds can be used for expenses such as paying off debt, funding school, or making home improvements.

Interest Rate Reduction Refinance Loan (IRRRL): Also known as the Streamline Refinance Loan, the IRRRL can help borrowers to obtain a lower interest rate by refinancing their existing VA loan.

VA Loan FAQs

  • Can I still qualify for a VA loan if I have used one in the past? Yes, under certain circumstances, you could qualify for another VA loan. For instance, if you used a VA loan to purchase a home and have since paid off that loan and still own the home, you can use your entitlement to purchase a second home. If you used a VA loan to purchase a home and have since paid off that loan, but you no longer own the property, you can have your entitlement restored and apply for another VA loan. You are eligible to re-use your VA eligibility from your first home purchase to your last.
  • What is the maximum loan amount available for a VA loan? The VA loan guaranty program does not impose a maximum amount that an eligible veteran may borrow using a VA loan but limits the maximum guaranty amount to $453,100 for 2018.