This may be the perfect time for veterans, active service members, and other eligible borrowers to consider a Veterans Administration home loan. With a Veterans Administration (VA) home loan, today's currently low interest rates are just one attraction. The actual loans still come from private lenders like other mortgages, but the VA says that its guarantees and special programs help qualified borrowers enjoy more favorable terms for home loans from participating lenders. Borrowers can apply for mortgages to buy a new house, refinance an old home at a lower rate, or even make home repairs or modifications.
The Many Benefits of Veterans Administration Loans
Military.com advises their readers to consider applying for one of these loans even if another offer seems cheaper. Finding an advertisement for a low APR mortgage is a lot different than qualifying for one. Very often, those low advertised rates may turn out to be extremely difficult to qualify for. Lenders may only offer loans with their very best rates to applicants with a credit score higher than 720. At the same time, credit score isn't an overwhelming factor with VA loans.
Some other advantages of these loans may also make them a better overall choice:
Credit scores: The Veterans Administration doesn't turn down applications only because of poor credit scores. They also only look at the past 12 months unless some serious issue, like a tax lien or bankruptcy, makes the situation more complicated.
Down payments: Most residential real estate loans require a 20 percent down payment. VA loans don't require a down payment at all.
Refinancing VA Loans: Borrowers who already have a VA loan can qualify for lower rate refinancing without having to qualify for a new loan through a program called the Streamline Refinance Loan.
Waived fees: Some borrowers may get their funding fees waived if they have suffered from a disability that was related to their service.
How to Qualify for VA Loans
The VA grants this assistance in order to help certain borrowers with homeownership. Even though terms should be easier for qualified service people, hopeful borrowers may still have to establish a decent credit history, prove they are financially able to afford their new home, and finally, qualify for a Certificate of Eligibility (COE). People who Qualify for a COE might be current servicemen, veterans, surviving spouses and individuals with certain other qualifying circumstances.
Are you ready to get started with your VA loan application? You are welcome to apply for the program with the VA or a participating private lending company. At some point, borrowers will need to produce the COE. Veterans, active members of the armed services, and members of the National Guard or Reserve can find instructions to apply online or by mail on the Veterans Administration website. Surviving spouses may also apply by mail.
However, many lenders also have access to the application system. These private lenders may be able to provide assistance and very fast results. In fact, the VA encourages people to apply through a lender as they may be able to establish eligibility and produce the certificate within seconds.
Mike Dulla works as the president and founder of United Home Loans, a Chicago mortgage brokerfirm founded in 2002. United Home Loans has closed over 10,000 loans with over $2.5 billion in closed loan volume.