The Complete VA Home Loan Guide
Everything you need to know about the VA Home Loan Program
What is a VA Loan?
A VA Loan is a type of mortgage loan which is guaranteed by the United States Department of Veterans Affairs (VA). The VA Home loan program is available to American veterans, active duty U.S. military, and under certain circumstances surviving spouses. The program can be be utilized to purchase single-family homes, manufactured homes, multi-unit properties, select condominiums and new constructions. The VA does not originate loans, they simply guarantee the loan. The VA’s responsibility is to set and enforce the rules for who may qualify, and set minimum guidelines and requirements under which mortgages may be offered. The intention of the program is to supply home financing to eligible veterans and help veterans purchase real estate with no down payment.
Benefits of the VA Home Loan
No Down Payment
No Private Mortgage Insurance
Lower Interest Rates
VA Loans vs. Conventional Loans
- If you qualify, you get to take advantage of the $0 down payment for a home loan.
- Banks simply don’t require you purchase private mortgage insurance because the loan is backed by the federal government.
Competitive Interest Rates
- The VA guarantees the loan so the lenders assume less risk. More safety and flexibility means a better rate for you!
Easier to Qualify
Banks assume less risk and have less stringent qualification standards for VA Loans because the loans are backed by the government, making them easier to obtain.
Up to 20% Down
- Conventional loans generally require down payments that can reach up to 20% to secure a home loan, pushing them out of reach for many homebuyers.
Banks require borrowers to carry mortgage insurance if they finance more than 80% of their homes value. An additional expense added to your monthly payment.
Increased Risk for Banks
- Without government banking, the banks assume more risk and therefore aren’t able to offer as competitive rates.
Much stricter qualification procedures which often times puts homeownership out of reach for some homebuyers.
If you’re a veteran, and have never used your VA loan entitlements, you can borrow as much as a lender is willing to extend, without a down payment. The loan limits for VA Home Loans come into play when buyers have less than their full entitlement. Either because they’ve currently have an active VA loan or they’ve lost a previous one to foreclosure. If you’re curious to see if VA loan limits affect you, please email us firstname.lastname@example.org