Nov 19, 2022

Everything You'll Want to Know About VA Loans

VA loans help make home ownership more attainable for service members and their families though more flexible guidelines, among other benefits like zero down.

What is a VA Loan?

VA loans help make home ownership more attainable for service members and their families though more flexible guidelines, among other benefits. But did you know the Veterans Administration does not actually serve as the lender for VA loans?

These loans however, are instead backed by the VA, which allows lenders to structure the loan according to VA guidelines without much of the other eligibility criteria that other types of loan options require.

Advantages of VA Loans

Benefits of the VA loan are bountiful and enticing. Not only are closing costs lower than with other loan options, but no down payment is required.

This means that while other buyers are spending months or even years saving up the money often required upfront, approval for a VA loan means you could be ready to buy your home now. VA also has more lenient credit requirements, and without the need for mortgage insurance, you’ll save on your overall monthly payment.

Eligibility

  • While VA loans are extended specifically to veterans and active-duty service men and women, this doesn’t mean that every one is eligible. First, eligible applicants are required to have served either:-A minimum of 90 days in wartime
  • A minimum of 181 in peacetime
  • If no longer in service: for 24 months, or the full duration of your orders
  • Reserves or National Guard: No less than 6 years

Surviving spouses of veterans can even also be eligible, as long as they have not remarried since. Of course, in any case a dishonorable discharge would make the applicant ineligible.

If you have questions about your eligibility for a VA Loan, a preferred lender in your area can help.

 

What You’ll Need To Apply

It’s important to remember that the process is just like with any other mortgage for the most part, with a few exceptions.

A VA loan requires a little more documentation in order to verify your service and determine eligibility, but don’t. In addition to the standard documents your lender requests, you should also be prepared to provide the following:

DD-214: This outlines the specifics of and separation from the service, and can be requested from the National Personnel Records Center. If you’re active-duty, you won’t have one of these, but can request a statement of service from your commanding officer instead.

Form 26-1880: Ideally, you’ll complete this form along with the loan application, as it serves as a request for your COE.

Certificate of Eligibility (COE): Your VA-approved lender can usually pull this quickly on your behalf, as long as you have your DD-214, mentioned above.

Commanding Officer Statement of Service: This applies to active-duty service members, as you would not yet have a DD-214. Instead, a statement outlining current and remaining time of service from your commanding officer will suffice.

Verification of Child Care Expenses: If you have dependents on the loan application, the VA will need to know how much is spent on childcare each month. You’ll have to provide signed verification of your monthly childcare costs, or a written statement if childcare is provided for free by a stay-at-home parent or other loved one, for example.

Limitations and Guidelines

Any lender will tell you that the guidelines for VA loans are typically stricter than some of your other potential mortgage options, but buyers tend to agree that the long-term benefits outweigh any upfront headaches. It’s a common myth that the VA’s property requirements are frustratingly restrictive, but in most cases, the MPRs (or minimum property requirements) are all things a buyer would generally be looking for in a house anyway. However, there’s always the potential for additional requirements that can admittedly serve as seemingly unnecessary red tape- but rest assured that your lender’s due diligence is only intended to protect veteran buyers.

Wondering if a VA Loan is right for you? Review your options with a preferred lender in your area now


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