Articles and Advice
A Veteran's Administration loan is one of the most generous benefits offered to America's military veterans. In fact, many veterans find the VA loan a better proposition than conventional real-estate loans and even other government-funded mortgages.
Perhaps the major advantage of a VA loan is that there's no need for a down payment. Generally, conventional loans call for a down payment and may cover only 80 to 85 percent of a home's value.
A VA loan can allow veterans to buy homes when they don't otherwise qualify for a conventional loan. Backed by the U.S. Department of Veteran Affairs, these loans let homebuyers get lower rates and qualify for a more expensive home than they would otherwise. Further, veterans can qualify with lower credit scores, and will not have to pay Private Mortgage Insurance (PMI).
An additional bonus for veterans who receive monthly disability benefits is that they don't need to pay the VA funding fee, which can be from 0.5 to 3.3 percent of the overall loan.
Here's a look at who can qualify for a VA loan, and how to go about it.
Eligibility for a VA Loan
Who is eligible for a VA loan? A Certificate of Eligibility, or COE, will be given to veterans or family members who meet one of these requirements:
Requirements for Getting a VA Loan
As mentioned above, veterans with lower credit scores can qualify for a VA loan. Nevertheless, there are some requirements for getting a VA loan, such as these:
Find a Real Estate Agent Who Knows VA Loans
Homebuyers seeking a VA loan should see real estate agents who are familiar with the VA loan process. This is particularly important when it comes to the fees involved with VA loans. The VA funding fee is a one-time payment. It is owed by the veteran on a VA direct home loan or a VA-backed loan. This fee helps lower the cost of the loan for U.S. taxpayers since the veteran doesn't have to pay down payments or monthly mortgage insurance. In most cases, veterans with disabilities are exempt from this fee.
What's more, an agent with VA loan experience won't waste your time with purchases that you can't buy with your loan. They can also have an advantage when it comes to negotiating with the seller's agent. They may be in a position to explain a veteran's story and appeal to the heart of a seller weighing several offers.
You of course can also look at other loans, either through the Federal Housing Finance Agency, which includes the mortgage-loan lenders Freddie Mac and Fannie Mae. There may also be some government-funded loans to pursue through agencies such as the U.S. Department of Agriculture or the Federal Housing Administration.
Good luck on your road to homeownership. If you're a veteran and are ready to pursue a VA loan, consult your VA Benefits Advisor today.