What happens when you don’t have enough money to purchase that home you want to, to live comfortably like most homeowners? Well, this is where the idea of loans comes in; the VA loan is one of the most popular veteran loans available for veterans who wish to purchase new homes. The VA home loan was created by the U.S government to assist retired service members in purchasing homes without having to provide a down payment and without having excellent credit.
VA home loan has been available for many years and has provided millions of services members and their family’s loans for purchasing their homes. The VA loan is designed for service members and select military spouses, and is issued by private lenders and guaranteed by the U.S Department of Veteran Affairs.
VA Loan Benefits
VA home loan has become so relevant in recent years that it is now considered lifeline for most veterans seeking loans to purchase their homes. This is also because its credit standards and down payments requirement favors most veterans seeking loans. Veterans are given loans even if they do not have excellent credits and they pay $0 down payment for VA loans. Private lenders create easier loan requirements for veterans because the US departments of Veteran Affairs offers a guaranty to them which means the lender is protected against loss even if the buyer fails to pay back the loan.
It’s quite awesome when you can get loans without offering down payments and can pay them off early if you want without incurring any penalties. VA loan when compared with other veteran loans has competitively low-interest rates and is guaranteed by U.S department of veterans. You can use your VA loan to buy a home, build a new home; improve the structures of your existing home or even refinance an already existing mortgage. However, VA loans are given out for only your primary home residence; you cannot use for vacation or investment properties.
Eligible veterans do not really have a maximum loan that they can borrow from the lenders; however, VA loan decides the level of liability it assumes in veteran loans. The limit of liability the loan assumes might affect the amount of money lenders might want to lend out to you. Eligible veterans or active military personnel can get loans up to $417,000 with no down payment. But this amount loaned to veterans or military personnel may be higher in counties that have a higher cost of living. The county limits are used to calculate VA’s maximum guaranty amount for loans, which may affect how much lenders are willing to loan to you.
Requirements of VA Loan
Just like every other loan out there, there are basic requirements you need to meet to enable you to enjoy the VA loan services. You need to meet certain qualifications to be considered eligible for the loan, apart from the credit requirements (lenders often require minimum credit of 620) and income requirements; you need to meet other requirements. This program is designed for active-duty military members, veterans, surviving spouses of service members, and current or past members of National Guard or Reserve. If you are any of these and you wish to be considered eligible for VA loans, you need to meet one of the following requirements:
- As a veteran home buyer, you must have served 90 consecutive days of service during wartime or
- You may have served 181 days of services during peace time
- Also, you must have served more than 6 years in the National Guard or Reserves service
- You are also considered eligible if you are spouse to a service member who died in the line of duty or has a disability as a result of serving the country.
Finally, you need to present a letter of eligibility or COE from the VA to the lender to show that you qualify for the program and you can apply for a COE online. VA loan website is available for you to visit and get to know more about its service, loan terms, limits and more.