20 Sep VA Home Loans Benefits And Requirements
Buying your first home is a massive investment. And, for Veterans, who dedicate their lives to the nation, having abundant funds isn’t always in the plans. But, to help the nation’s favorite purchase their dream home, a VA home loan is perhaps one of the most valued military benefits.
VA home loans are 0-down mortgages available to qualifying Veterans and surviving spouses. In short, these home loans help you buy your home without paying any down payment and also come with extremely low interest rates.
Another thing special about a Veteran home loan is that the mortgages are backed by the US Department of Veterans Affairs (VA) and are provided to a Veteran with a low credit score too.
Here’s how you qualify for a VA home loan:
VA Loan Requirements
To get started with your VA home loans loan application, you must apply for the VA Certificate of Eligibility (COE). To qualify for the COE, you must meet any ONE of the following requirements:
- You have served at least 181 consecutive days of active military services during peacetime.
- You have served at least 90 consecutive days of active military service during wartime.
- You have at least 6 years of experience as a National Guard or Reserves or have served at least 90 days under Title 32, with at least 30 days being consecutive.
- You are a surviving spouse of a service member/Veteran who lost their life in the line of duty or due to a service-related duty.
Once you meet the above criteria, you must submit the following documents, depending on your military status.
Veteran: DD Form 214
Active Military Member: Statement of service signed by an officer
Current/Former National Guard or Reservist: DD Form 214, an annual point statement, DD 220 with corresponding orders.
Surviving Spouse: Veteran’s DD Form 214, marriage license, VA form 21p-534-ARE
Though the VA COE is one of the most important requirements for a successful VA home loans application, you must also meet the following requirements:
Qualifying Property: The property must only be for a primary residence, where you agree to move in within 60 days of loan closing. Also, the property must meet all MPRs.
Credit Score: Though the VA does not require you to have an outstanding credit score, you must have at least a minimum score of 580 to qualify.
Income: You should have an appropriate debt-to-income ratio and enough residual income.
Veteran Home Loan Benefits
One of the greatest advantages of a VA loan is that you don’t need to make a downpayment. Other than that, here are some other VA home loan benefits:
Lower Rates: Compared to conventional loans, VA loans are available at an incredibly lower rate, mainly, because a portion of the VA loan amount is backed by the VA.
No Down Payment: You don’t need to make a downpayment for a VA loan. If you, however, have enough funds, making a downpayment can help you reduce monthly payments. However, if there’s no access to funds, you can go for the no-down payment option.
100% Equity Value: You don’t need equity to refinance your VA loan at a lower rate.
No Private Mortgage Insurance: Apart from no down payment options, you don’t need to pay for Private Mortgage Insurance either.
Lenient Requirements: With lower credit scores and even lower income requirements, it is pretty easy to qualify for a Veteran home loan.
Summing It Up
A Va loan is an earned military benefit. With perks like a no down payment requirement and no pre-penalty requirements, you can leverage this hard-earned benefit to purchasing your dream home.