The U.S. Department of Veterans Affairs is not a direct lender. The loan is made through a private lender (like Churchill Mortgage) and partially guaranteed by the Veterans Administration, if guidelines are met.
A VA loan can be used for purchasing or building a new home, refinancing a current mortgage, repairing and/or improving your existing home, or installing home efficiency measures. With interest rates still hovering at all-time historical lows, it only makes sense to look at VA loan options if you think you’re eligible.
Here’s the top 10 things you must know about the program:
The Veterans Administration (VA) Home Loan Guaranty Program is an entitlement for active and honorably discharged service members. The program provides a “handbook” of guidelines that detail a delegated approach for lenders evaluating credit and income underwriting.
Financing is available up to 100% of a home’s value for both purchase and refinance transactions. For veterans with low credit VA loans can be especially beneficial as they provide additional flexibility and can be less costly in comparison to conventional loan products.
Unlike conventional loans, the VA loan also has no required mortgage insurance for loans greater than 80% of a home’s total value, making it a cost-effective option for buyers with smaller down payments.
Most members of the regular military, veterans, reservists and National Guard are eligible to apply for a VA loan. Spouses of military members who died while on active duty or because of a service-connected disability also can apply.
As of January 1, 2020, there is no longer a maximum loan amount.
Basic allowance for housing can be used toward your monthly mortgage costs. Keep in mind, the home being financed must be your primary residence.
Lower closing costs—the VA limits fees and costs that veterans must pay on closing day. This works for both purchasing a home and refinancing.
There’s no pre-payment penalties. If you decide to pay off your home loan early, you won’t have any extra fees associated with this. Plus, you’ll save on the total interest over the life of your home loan.
Become a Churchill Certified Home Buyer so you can save time and stress during your home buying process. This comes in handy if you’re in a multiple offer situation since home sellers are looking for buyers who are certified. This shows you’re a serious buyer and ready to make an offer!
Funding fees are part of all VA loans (unless you receive VA disability compensation or are a qualified surviving spouse). Many times, this fee can be added to the total loan amount, rather than being paid upfront—keep in mind this will increase your monthly payment and the amount of interest you’ll pay during the life of your loan.
For more information about VA home loans, contact a Churchill Mortgage Home Loan Specialist in your area.