What Is A VA Loan?

The VA loan is a mortgage loan backed by the Department of Veterans Affairs for veterans who have served in or are currently serving in the U.S. Military. The VA doesn't lend money to VA loans, but it does back loans made by private lenders (banks and savings and loans or mortgage companies) for veterans, active military personnel, and eligible spouses.

There are three types: purchase loans, refinance loans (or IRRRL), and cash-out loans. A VA loan has many benefits, but the biggest benefit is that there is no down payment required to buy a house. For veterans and active military personnel, this can allow them to own their homes.

Who Is Eligible For VA Loans?

VA loans are available to military personnel, veterans, and their families. This home-buying benefit is available to the following:

• Veterans

• Personnel on active duty

• Reserve members

• Members of the National Guard

• Some surviving spouses

Also, you must have good credit and sufficient income. You must also use the house for your personal use. Are you still unsure if your eligibility is met? For a complete list of eligibility requirements, visit the Department of Veterans Affairs website.

What Are The Benefits?

The VA loan program has some of the best and most flexible benefits. It is only available to military personnel, veterans, and their families. These loans are more affordable than traditional loans because the borrower does not have to pay a downpayment, and there is no requirement for private mortgage insurance (PMI).

Here is a complete list of benefits as taken directly from Veterans Affairs:

• No down payment is necessary

• Competitive and negotiable interest rates

• Ability to finance the VA financing fee (plus reduced fees with a minimum 5 percent down payment and exclusion for veterans who have received VA compensation).

• The VA regulations limit the amount that you can be charged to cover closing costs.

• Closing costs can be comparable to other types of financing (and maybe less).

• The seller may pay closing costs.

• Private mortgage insurance premiums do not need to be paid.

• An assumable mortgage.

• Right to Prepay your mortgage with no penalty

• VA will provide assistance and a warranty for homes that were inspected during construction.

• VA assistance for veteran borrowers who are in default because of temporary financial difficulties

What Are The Best Ways For Veterans And Military Personnel To Get VA Loans?

These steps can be followed by veterans, active military personnel, and military families to obtain a VA loan:

1. You must ensure that you are eligible to receive a VA loan. For a complete list of eligibility requirements, visit the VA website.

2. Locate a lender that is a participant in the VA loan program. You can search for a VA lender near you.

3. To prove your eligibility for a VA loan, you will need a Certificate of Eligibility. Learn how you can get a Certificate Of Eligibility. Your lender may request one for you.

4. Apply for your VA loan. The VA lender will help you complete the necessary steps to finance your home.

How To Find A VA Lender

For veterans and military personnel, there are many options for finding a VA lender. These include asking friends for recommendations or looking on the VA website. It is worth shopping around and talking to multiple lenders, just as with conventional loans.