21 Aug Things You Should Know About a Veterans Loan
Serving in the military comes with a long list of benefits. However, one of the most hard-earned and valuable benefits is a Veterans loan. VA home loans are mortgages available to service members and their families to help combat homelessness.
They come with benefits like-
- No downpayment requirements
- Lower interest rates
- No pre-payment penalties
- No PMI requirements
- Easy eligibility criteria
- Flexible guidelines
To reap the benefits of a Veterans loan, you must meet certain eligibility criteria to attain the Certificate of Eligibility (COE).
One of the following must be true to qualify for COE-
- You are a current/former military member who has served at least 181 days during peacetime or 90 days during wartime, OR
- You are a current/former reservist with at least six years of experience, OR
- You are a spouse/family member of a Veteran who either went MIA, was a POW or died in the line of action or from a service-related disability.
APPLYING FOR A VETERANS LOAN
After making sure that you are eligible for a VA loan, you can apply for the COE in either of the following ways-
- You can apply online.
- You can mail the form to the VA office.
- You can visit a regional VA office.
- You can ask your private lender to get it for you.
After getting your COE, you can move forward with the VA loan process.
HOW DO VA LOANS WORK?
A Veterans loan is a mortgage facility backed by the US Department of Veterans Affairs. This means that if the borrower fails to pay back the loan in time, the VA will pay a certain amount of the loan to the VA-approved private lender.
This helps the lenders to provide loans on comparatively lower interest rates and flexible guidelines.
OTHER ELIGIBILITY REQUIREMENTS
In addition to obtaining a COE, you must also meet other financial and property requirements to qualify for a Veterans loan.
Though the VA does not require you to have an outstanding credit score, you must pass certain financial requirements of your VA-approved private lender.
You must have the following to qualify for a Veterans loan-
- A minimum credit score of 620
- Enough residual income
- Appropriate debt-to-income ratio
- Appropriate credit history.
Besides satisfying the lender’s requirements and meeting the conditions to qualify for the COE, you must ensure that the chosen property meets ALL the Minimum Property Requirements (MPRs) defined by the department.
MPRs are certain measures adopted by the VA to ensure that the house is safe for living. However, you must note that this is not a house inspection. These are merely certain measures to ensure the house comes with no harm. It is, however, recommended to get a house inspection before you close a deal for a Veterans loan.