22 Jan VA Home Loans: Everything you Need to Know.
The VA loan is a beautiful loan product. VA loans are actually funded by mortgage lenders and financially guaranteed by the U.S. Department of Veterans Affairs. Active and veteran military members reap the benefits of using this government-backed financing to buy their home. It is crazy to think that only 10% of the living service members and veterans in the U.S. have taken advantage of their VA loan benefits.
The requirements of lenders for so many loan products have greatly tightened since the collapse of the housing market. Fortunately for our former and active military, the VA loan does not fall into that category of loans with strict lending requirements.
What Makes the VA Loan so Awesome?
Interest Rates
VA home loans have literally the very best rates and pricing in the mortgage marketplace. The base pricing is more aggressive and there are fewer adjustments or add-ons compared to any other avenue of mortgage finance.
Down-Payment Requirements
VA loans have the potential of offering the VA borrow 100% financing! A veteran using his or her benefits will more than likely be able to put less money down and still get attractive interest rates and terms. This is a huge win for borrowers that want to buy now in order to take advantage of low interest rates but do not have a 20% down-payment.
No PMI
This is huge! With almost all other loan products, private mortgage insurance (PMI) is required when the lender is financing more than 80% of what the home is worth. This means that if a borrower does not have a down-payment equal to 20% of the home’s value, the lender will add the cost of the private mortgage insurance to the monthly payment. In other words, the borrower pays for insurance to protect the lender!
VA loans do not require mortgage insurance no matter what percentage of the home’s value is being financed! This is a big win for the VA homebuyer.
Leniency
A VA home loan is far more forgiving on several factors relative to other financing avenues. A VA borrower with less-than-perfect credit can get a better rate than a non-vet with perfect credit history. Further, there is more flexibility on the debt ratios allowing buyers to go higher than the maximums of other loan programs.
VA loans are just all-around easy. “They are typically easier for any lender to successfully get done for their clients,” says Brady Benham, Finance Manager at Redondo Mortgage. “The process is simple and the guidelines are more relaxed which in turn yields a very high success rate,” adds Benham.
Recycling the Benefits
Who doesn’t love the idea of recycling? VA loan benefits are recyclable! The benefits provided by the Department of Veterans Affairs may be restored to the Vet’s maximum guarantee. If the VA borrower sells their home in order to upgrade to another property, the previously used loan benefit can be restored and used on the next home purchase. This amazing loan benefit can be restored over and over to grow with you and your family. How sweet is that?
Who is Eligible for a VA Loan?
This magical home financing tool is only offered to a select group of brave individuals. Here is a list of what qualifies someone to be eligible for a VA loan.
Active Military
If you are actively serving in any branch of the military, you are eligible for a VA loan. The only additional requirement for that is that you have served for at least 90 days continuously.
Reserve or National Guard
National Guard and reserve members are eligible for VA loan benefits but there are a few guidelines for time served. Visit the Department of Veterans Affairs website for specifics.
Military Veterans
If you served honorably in any branch of the U.S. military and meet the minimum active-duty service requirement, you are eligible to receive the VA loan benefits. Visit the Department of Veterans Affairs website for specific minimum active-duty service requirements.
Spouses
The VA extends benefits to spouses that identify with one of the listed situations while not remarrying.
- Survived a spouse who died in service or from a service-related disability
- Survived a spouse who was missing in action (MIA) or a prisoner of war (POW) for at least 90 days (limited to a one-time use of benefit)
- Survived a spouse who was rated continuously totally disabled for the specified period of time, and was eligible for disability compensation at the time of death by any cause
Recent Updates to VA Loan Limits
As of January 1, 2020, VA loans are no longer subject to conforming loan limit maximums! This is good news for our veterans living in markets with higher home prices. Home sellers in these markets will most certainly benefit from this as well. Hopefully, these higher-priced markets will see an influx of uber qualified VA homebuyers that are no longer restricted to using their VA benefit in lower-priced areas.
Want more info? Ready to Take Advantage of Your VA Loan Benefits?
Contact Redondo Mortgage Center today for more information about VA loans and to check your eligibility. We have extensive experience helping military veterans and active military to purchase homes with their VA benefits.
Call us direct at 310.318.8999.
Email us: info@redondomortgage.com
Or get started with the pre-approval process here.
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