A Quick Crash Course on VA Loans
So you served in the military and gained some pretty wicked life skills. Impressive! The military offers so much—but . . . did you learn about home loans and mortgages? Specifically, we’re wondering if you’ve heard of the VA Loan?
A Veterans Affairs Loan is a massive benefit you don’t want to miss, especially if you’ve done the work to earn access to it. After all, you’ve served in the armed forces, put some parts of your life on hold—like settling down, perhaps—to give back to your country. That deserves acknowledgment and any benefits that come with it.
It’s no exaggeration that there are many Veterans who are unaware of this program that allows them to get a home loan with no down payment. We consider it a great loan program offered to future homeowners, and today we want to fill you in on the basics of how VA Loans work.
First of all, applying for a VA Loan is done the same way as applying to get any other home loan. You follow the standard steps:
- Get pre-approved.1
- Find a home and put an offer on it.
- Go through VA appraisal and underwriting.
- Close on the home.
It’s the same as all other procedures to get a home loan, but it’s a great loan program available. So if you’ve done the honor of serving in the military, Uncle Sam helps you out by granting you the right of utilizing one of the most enviable loan programs offered.
The VA doesn’t provide the loan. Instead, the Veterans Affairs works with lenders to determine your eligibility for this amazing benefit. Your lender communicates with the VA that you want to use your VA Loan benefit. The VA relays information back to your lender that they then use to determine your eligibility.
You can use your VA Loan entitlement more than once. A common misconception is that the option to use this loan goes away once you’ve used it. Not so! Provided you reinstate your entitlement and pay off your previous loan, and you apply for another VA Loan, you can use your entitlement over and over.
You can’t snag a VA Loan for any old house. This loan is reserved specifically for certain types of homes. These might be best defined as move-in ready single-family homes, a condo, a townhome, and some multi-unit properties and modular houses.
Take that idea and expand it just a little—a VA Loan is reserved for primary residences only. You can’t use it to buy a cabin in Sun Valley or a retreat in the Keys, unless you’re going to live in that Key West retreat (if so, go you!).
Ready for this one? No monthly mortgage insurance. It’s true! If you’ve ever used another loan program and ended up with mortgage insurance rolled into your monthly mortgage payment, you’ll appreciate this. A VA Loan carries no monthly mortgage insurance.
If you don’t know what mortgage insurance is, it’s a fee you pay with other programs when you don’t put 20 percent down on a home loan.
VA Loans on both purchase and refinance options come with a required funding fee, but hey, it can be rolled into the loan or waived for some Vets with disabilities related to their service.
All in all, this loan unlocks the future for our Veterans and we’re thrilled to offer it within our repertoire of loan options at Academy. If you’re ready to learn more about it, contact us today!