Holidays like Veterans Day and Memorial Day are holidays for remembering and honoring dedicated military personnel and veterans who died in the service of our country. Their bravery and sacrifice grant us the security and freedom. With this year’s Veterans day fast approaching, it’s a great time to refresh your knowledge of VA loans that helped more than 22 million service members become homeowners since 1944. For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. It is available to millions of veterans and active military members and are somewhat easier to qualify for than conventional mortgages.
The best way to start the VA loan process is with a thorough understanding of the program and its benefits. Here are five things you may not know about VA loans.
1. They’re reusable.
Even if someone has used a VA loan in the past, they’re still eligible for a new loan. You can use your full VA entitlement over and over again as long as you pay off the loan each time. Furthermore, service members with bankruptcies and foreclosures can still get a VA loan, even if you’ve lost one to foreclosure or currently have one.
2. Only certain homes are eligible.
VA loans are primarily designed for move-in-ready homes including single-family homes, condos, modular housing and more. While there are a few exceptions, commercial properties, investment properties, and vacation homes are typically ineligible in this kind of loan.
3. The VA doesn’t issue the loans.
The VA isn’t in the business of issuing home loans. Instead, they just guarantee on each qualified mortgage loan (usually up to 25 percent), making lenders more confident and allowing service members to get better terms and rates.
4. No mortgage insurance required.
Mortgage insurance is a monthly fee you pay with other programs when you’re not putting at least 20 percent down. The VA’s guarantee eliminates the need for service members to purchase mortgage insurance for their loans, saving them thousands of dollars. However, there is a mandatory fee about 2% of the loan amount for VA loan recipients and this can be rolled into the loan amount or waived for those with service-connected disabilities.
5. They have co-borrower restrictions.
Some loan programs lets you get a loan with just anybody but that is not the case for VA loan. Having a co-borrower who isn’t the spouse of the service member or another veteran with VA loan entitlement who will also live in the home will require a down payment on the home.
If you are ready to take the next step towards purchasing your new home and for all of your other real estate needs, contact me today at (703) 228-9788. Whether you are buying or selling, I will be here to help you every step of the way.