What is VA home loan?
VA home loan is a mortgage loan program created by the U.S. Department of Veteran Affairs (VA). The main goal of this mortgage loan program is to help veterans and their families to buy or build their own homes. In this program, the Department of Veteran Affairs helps the qualified borrowers indirectly by covering their mortgage insurances. As a result, a qualified borrower doesn’t have to pay his mortgage insurance and no minimum credit score requirement is applicable for that person. Since 1944, over 20 million veterans and their families had taken the help of VA home loan program to build or buy their desired homes.
Advantages of VA home loans
The VA is a different kind of mortgage loan program than the other conventional program as it is specially launched for the veterans, military personnel and their families. The most attractive advantage of VA home loan program is that the selected borrower doesn’t have make any down payment. Another benefit is, the closing cost of this program is lower than the other conventional programs and may as well be paid by the seller. No PMI in this program is also a big relief for the borrowers. Finally, this program has flexible requirements and process for the qualified borrowers.
Sufficient income, stable financial condition, valid certificate of eligibility and finding a VA loan lender in the related area are required to apply for a VA home loan. Also, an applicant needs to show a valid cause to apply for this loan. The valid causes are:
- To buy home or a unit of a VA permitted project.
- Buy and modify a home.
- Establish a home.
- Installing energy efficient features.
- Purchase a manufactured home.
List of the people who are eligible for applying for VA home loans are:
- Surviving spouses (who remained unmarried).
- Members of National Guard.
- S. citizens who served for a friendly government with the U.S. in the Second World War.
- Personnel with active duty.
- Individuals who served the U.S. government in the Second World War by working in some certain organizations.
- Reserve members.
- The person whose spouse had died on line duty or died due to any disability acquired from duty.
P.S.: A military personnel is required to perform a minimum peace-time duty of 180 days or an on-field duty of 90 days to be eligible for applying for VA home loans program. Members of the National Guard are required 6 years of service to be eligible.
VA home loans have varying range according to the causes the applicants show behind their loans. The loan approval process is neat. clean and strict to make sure that the applicants make the right use of the loans. A short view of the whole process is given below:
- Pre-qualifying and pre-approval: This process starts from filling out a secure VA contact form. Then a loan expert from VA discusses with the applicant to understand the financial condition and objectives of the applicant. This process decides the amount of money an applicant gets from the loan program. After that, pre-approval process begins which requires submission of a wide range of documents and information of the applicant. Once all the required documents are submitted, the loan specialist issues the applicant with a pre-approval letter.
- Finding realtor: The applicants are now allowed to contact with military friendly real estate agents through the Veterans United Realty. The applicants are insisted to use the help of an agent by the VA loan program as the applicants will get a $250 bonus at closing if they use the help of an agent.
- Approval and finishing process: After selecting a perfect home, an applicant has to deal a contract with the seller. A well experienced agent can be very useful in this process. The true market value should be determined before signing any contract. So an appraisal of that property takes place. Then an underwriter will review the whole process to make sure its stability. If everything goes all right, a closing date will be scheduled for the applicant to sign necessary paperwork to finish the whole process.
This article is focused on useful and necessary information about VA home loans. For any additional minor details, you are recommended to visit the official website for VA home loans program.