25 Feb Frequently Asked Questions about VA Loans
VA Home Loans and Frequently Asked Questions
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Searching for a home and looking for the right mortgage program can definitely be intimidating at times. You want a great deal and if there are programs out there that are distinctly meant for you to save money, you want to know about them. Well, luckily for you, you may qualify for the VA Home Loan program. This program is administered by the Department of Veteran Affairs and makes buying a home easier and cheaper than almost any program out there.
If you’ve got some questions, we’ve got some answers. Here are some of the most frequently asked questions regarding the VA Loan program.
What does it mean when you say “VA Loan?”
VA Home Mortgages, or loans, are available for nearly all members of the military, past and present, including active service members, National Guard Members, Reservists, and veterans. If qualified, the VA will guarantee up to 25 percent of the loaned amount. This takes away a lot of risk factors in financing the loans, which is completed by private institutions like mortgage companies, credit unions, and banks.
Why is a VA Loan better than other alternatives?
If you qualify for a VA Home Loan, there are many benefits to using this entitlement. These benefits include no required down payment, very competitive interest rates, and no requirements for mortgage insurance. There is a VA funding fee, which helps with the costs of the overall program, but even this can be rolled into the loan balance and not paid up front. You can also take advantage of refinancing options to lower your interest rate and receive cash from the equity you’ve built in your home.
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There are a number of other programs that complement the VA Home Loan meant to help servicewomen, Native American veterans, and disabled veterans who need accessibility upgrades to their homes to provide a barrier-free living space.
Who are the people most qualified for a VA Home Loan?
Almost anyone who has ever served in the Armed Forces is eligible for a VA Home Loan. This includes active members, National Guard members, Reservist, honorably discharged veterans, and even some military spouses.
In order to further qualify you will need to verify that you have frequent and sustainable income and average credit. To start the process of applying, you will first need to request your Certificate of Eligibility (COE) from the Department of Veteran Affairs.
Once I qualify, what type of property can I purchase with a VA Mortgage?
Just about any residential property that you intend on using as your primary residence can be financed through the VA Home Loan process. The only type of investment properties that are allowed are multi-unit residential properties (2-4 units) and only if your primary residence is one of the units.
Condominiums may be purchased with this program as long as they are on the VA’s approved list of communities. If you want to buy a lot, build a house, or a manufactured home, you can also do so with a VA Loan. Additionally, updating or improving your home can be financed through this program.
What can I do if I am denied for a VA Home Loan?
It’s important to remember that if you have been turned down for a VA Home Loan, it was by the individual lender and not the VA. This means there is a chance you could reapply with another lender. Before you do that though, you’ll want to find out the reason for your denial. Most denials come because of either issues with credit history or not having sufficient income to pay for the mortgage payments.
Your lender will send you a letter within 30 days (required by law) informing you of the denial. However, the letter you will receive probably doesn’t go into any great detail as to why you got turned down. Try calling your lender and inquiring directly with them. If your denial came because of a credit history issue, you’ll want to pull a copy of your credit history, fix any errors, and attempt to begin repairing any low points in your credit.
If you want a VA Loan, how do you apply?
In order to apply for a VA Loan, you’ll need to obtain a few things. First, you’ll need your Certificate of Eligibility (COE), which most VA-approved lenders will be able to pull for you directly from WebLGY, a VA database. If your lender is unable to obtain your COE, you may request it by fax or mail.
Next, you’ll need to prove your income. This means bringing copies of any and every investment account or bank account to your lender.
And finally, you will have to pass a CAIVRS check. This is where your lender will check if you have ever defaulted on a government-guaranteed debt in the past. These debts include things like student loans and FHA mortgages.
If you have any other questions about the VA Loan program, call your lender or go to the US Department of Veterans Affairs website.