by Shawn Clayton
on Friday, October 20th, 2017 at 10:42am.
Veterans and spouses of military personnel may find VA loans an attractive option to use to purchase their first home. Some benefits are that those with a less than excellent credit history or who may not be able to come up with 10 to 20 percent for closing costs can still buy luxury or waterfront real estate with this special home loan mortgage product without being burdened with additional fees.
Learn more about the VA loan and get answers to some preliminary questions in regards to VA eligibility requirements, down payment expectations and more.
Who Can Apply for a VA Loan?
Those who have not had a dishonorable discharge and have served their country for at least 181 consecutive days during peacetime or a minimum of 90 days in wartime may apply. This includes those members or veterans of the Reserves, the National Guard and their surviving spouses. Most members are qualifying under active duty.
What Are Some of the Eligibility Requirements?
In order to determine eligibility for veterans and surviving spouses, a veteran may need to show:
In addition, a Certificate of Eligibility is needed for this type of loan but this certificate is not needed to begin the mortgage process. The lender can get the certificate for a borrower when an applicant is going through the preapproval phase.
How Much Would the Down Payment Be Under a VA Loan?
With conventional loans, most large banks prefer that lenders put down 20 percent of the purchase price. Putting down less than that amount may incur additional costs, such as mortgage insurance fees and higher interest rates on a loan product. Loans made from the Federal Housing Administration also expects a larger down payment for the best rates.
With the unique backing provided from the VA, prospective homebuyers can put down less than 10 percent and even nothing down as part of the purchase of a Fair Haven home. The VA provides additional security to private lenders when it comes to this type of home loan. Buyers may be able to get into a home faster when approved for a VA loan, as less time is spent saving up
Does a VA Loan Require Mortgage Insurance?
No. Active military members and military veterans do not need to purchase mortgage insurance as VA loans are offered through private lenders and backed by the Department of Veterans Affairs.
How Much Can an Approved Borrower Get?
This depends on the price of the home and other factors. Individuals may receive $36,000 or more as part of their “basic” entitlement. However, “bonus” entitlements may be as much as $68,250 and given to those applicants needing a home loan of more than $144,000. Homes in areas with a high cost of living may get borrowers a higher calculation for full entitlement. Speak with a trusted VA lender or a real estate agent familiar with the VA loan process to learn more.
Get Into a New Home Sooner Than You Thought Possible
Borrowers are surprised by the more flexible requirements offered with a VA loan product. Borrowers may not need to worry about a significant down payment or closing costs with a VA loan. Reach out to a VA-lender to learn more today.