Va Loan Advantages – Are you interested in applying for a VA loan for yourself or on behalf of your military spouse? We’ll detail the benefits of VA loans over conventional loans, eligibility requirements, and how to apply. If you’re more video-oriented, here’s a short video to give you a high-level understanding of VA loans!
The VA home loan program began in World War II and was created in 1944 as part of the GI Bill of Rights. Our conscripted men and women sacrificed untold sums for this country. A small part of this sacrifice is the inability to carry on with day-to-day civic activities, such as making loans.
Va Loan Advantages
VA loans are designed to equalize this and allow active duty, veterans, and family members of designated military personnel to realize the American dream of buying a home. For a complete history of the VA loan program and its evolution, check out Veterans United’s timeline here!
Va Loan Benefits When You Buy A Loft Or Condo In Dtla
VAs help qualified service members, veterans, and surviving spouses become homeowners. As part of our mission to serve you, we offer home loan guarantee benefits and other housing-related programs to help you buy, build, repair, maintain or customize a home for your residence. – Department of Veterans Affairs
A VA home loan is a loan from a private lender that is approved and guaranteed up to a certain amount by the Department of Veterans Affairs. By guaranteeing the loan, the VA is able to limit the risk of lending to the bank. The result is that banks can lend to men and women with no down payment (100% financing), lower interest rates, no mortgage insurance and lower credit scores.
Here are the benefits of a high-rate VA loan in this easy-to-read infographic from the Lenders Network:
Once you’ve wandered between the different VA lenders and decided to go with one, you’ll need to have a Certificate of Eligibility (COE) to verify your military service details. Requirements vary depending on your situation, but in general, if you have served in the active military for at least six consecutive months, six years in the reserves or the National Guard, or the spouse of someone who meets these requirements, you may qualify for a loan for VA house!
Va Loan Requirements 2022| Nextadvisor With Time
Did you or your partner fulfill at least one of these? If so, you may qualify for a VA home loan program.
If you believe you are eligible and wish to proceed with applying for a COE, visit the VA site here detailing application details and methods!
As you might expect, a home equity loan allows you to get a loan for the house you or your partner will be living in. As I mentioned above and as the chart shows, the main benefits are less down payments, lower interest rates, no mortgage insurance and a lower credit score accepted. What this means for you is that you can buy a home with less money saved and pay lower monthly mortgage payments.
For starters, you must have a VA loan to be able to use the IRRRL program. You cannot refinance conventional loans using this VA program, but you can refinance through conventional routes.
Conventional Mortgage Versus Va Loan: A Comparison (with Infographic)
Then what is the purpose of refinancing? Basically, it turns your existing loan into a more attractive one. You refinance when you realize that you can get better terms for your loan. The main benefit or incentive is getting a lower interest rate. For example, if you get a loan with a 5% interest rate and the interest rate drops to 4%, wouldn’t you want to save that 1%? Why pay more correct? The government made the IRRRL program easy for military personnel and their families to easily refinance their VA loans when it was financially profitable.
Refinancing your VA loan may be referred to as a refinance loan or a reduced interest rate refinancing loan. Names are interchangeable. Again, the main benefit is lowering your interest rate and potentially shortening the term of the loan. Since the initial VA loan process has many steps, the refinance process is fortunately much more streamlined!
It’s a shame it happened, but there are plenty of attorneys who will contact you about refinancing your VA loan to “take advantage of these benefits.” While refinancing can be beneficial, there are plenty of lenders out there with pushy salespeople who will force you to refinance even when not financially viable. It’s not always a good idea to refinance! Especially when they add all these “cost savings” to the bottom of your loan. Check out this article highlighting the VA’s and the Bureau of Consumer Financial Protection’s warnings against these dangerous refinancing loan offers!
Do you have credit card debt with very high interest rates? Do you really need money to pay for your child’s education or to update your home. A cash refinance loan may be able to provide this for you. You should never easily cash out a portion of your home equity. Be sure to consult a reliable and honest lender about this program and the pros and cons of using it, given your current financial situation, before proceeding. You can learn more about it on the VA website here!
Va Home Loans
VA cash-out refinance loans are for homeowners who want to get some cash out of your home equity to take care of issues like paying off debt, paying for school, or home repairs. Cash refinancing loans can also be used to refinance non-VA loans into VA loans. The VA will guarantee a loan of up to 100% of the value of your home. – VA
Sometimes it’s difficult to plan your finances for a home or living purchase that happens and you have unexpected emergency medical expenses. Whatever the reason, a VA loan empowers you to buy the home of your dreams without having to put down the traditional 20% down payment. In fact, you can use 100% financing for your home purchase if you want.
If you have some money saved up, it’s usually advisable to set aside a little (about 10%) to secure a lower VA financing rate. VA financing costs “reduce the cost of borrowing to taxpayers given that VA loans require no down payment and no monthly mortgage insurance.” This helps the program become more independent in the long run. You can learn more about financing costs here!
With conventional home loans, you need to get a mortgage insurance policy for your mortgage. With a VA home loan, you can reap the savings of partnering with a VA. These monthly fees can really add up to a pretty penny! This is a great benefit for soldiers and women.
Va Loan Purchase
Mortgage insurance is an insurance policy that protects the mortgage lender or title holder in the event that the borrower defaults, dies or is unable to fulfill the obligations of the mortgage contract. Mortgage insurance can refer to private mortgage insurance (PMI), qualified mortgage insurance premium insurance (MIP), or mortgage title insurance. – opedia
Have you paid your debt on time? Have you paid all your medical bills in the past? Debt outstanding can affect your credit score. VA loans allow you to get a loan with a lower than average credit score. Generally, a FICO credit score greater than 620 will be accepted by most VA lenders. If you are between the ages of 580-620, you may still be able to take advantage of a VA loan if you make a larger down payment.
Credit makes the world go round. You need to know your credit score and any debt that is currently lowering it. For a free report of all your credit scores (FICO, Experian, Equifax, TransUnion) go to AnnualCreditReport.com. They are authorized by the federal government to provide you with all three results for free every 12 months. Your FICO score is definitely the most important when it comes to securing a loan, and that’s what I mean when I say you want at least a credit score of 620!
The purpose of VA loans is to empower our soldiers and women to be able to buy homes. Competitive low interest rates allow you to pay less interest and lower your monthly payments, making home ownership more financially viable.
Pros And Cons Of Refinancing A Va Loan
If you happen to secure a VA loan during a period of higher interest rates and lower average interest rates, you can easily and quickly refinance your loan for instant savings! They make the process quite easy and painless with minimal paperwork.
When banks lend money to customers, they are interested in minimizing risk (i.e. the possibility that the customer will default on their loan or be unable to repay it). If you already have debt or a current loan, such as a car loan, it makes sense to do so
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