Looking for a house loan as part of the US military? Whether you’re an ex-military or still under service, a Veterans Affairs (VA) home loan is your privilege. However, you still need to qualify for this; if you do, you can purchase property, build a home, or refinance an existing home mortgage with no down payment at all. In addition to that, you get excellent rates and financing without worrying about a mandated cap. In this post, we will talk about the basics of VA loans.
The Basics of VA Loan
Private lenders issue VA loans but they’re backed by the US Department of Veterans Affairs. That is why they offer little to no downpayment and no Private Mortgage Insurance (PMI).
The VA loan is one of the few today that don’t have a down payment. The lack of PMI also saves borrowers money every month, compared to conventional loans. Since it’s backed by the government, you can expect better rates that will save you a lot of money.
VA loans are also more lenient because you can qualify even if you don’t meet all the requirements for other conventional loans.
The Funding Fee
Most VA loans come with a Funding Fee, which goes to the Department of Veterans Affairs to help back up this type of loan. The good thing is that not everyone has to pay the fee, including military men and women with service-related disabilities.
The fees can go up to 2.3% for first-time VA loan borrowers, and it can go up to 3.6% for repeat homebuyers. You can roll this fee into the loan amount.
Another advantage of VA loans is that closing costs are lighter as well. In some circumstances, the seller will even cover them, further reducing the associated costs of your property purchase.
The Amount for VA Loan Qualification
The amount you can qualify for this type of loan will depend on several factors. As with any other loan, an applicant’s debt ratio is greatly considered here because it will allow the lender to determine how much they can afford to pay every month.
If you plan to apply for a VA loan, the first step is to get pre-qualified. Find a lender and prequalify to get an estimate of how much you can afford based on your credit, income, and other factors. This is the basic first step that will lead you towards a pre-approval.
When you prequalify, the next step is to get preapproved. This is a major step in the VA loan process as it will put you in the driver’s seat to act when you find a home that you like. Your lender will verify your income and financial information to know your purchasing power. When all’s well, you’ll receive a preapproval letter that will show real estate agents and home sellers you’re a strong and serious buyer.
Now, it’s time to put in an offer. When you find the perfect VA loan, it’s time you make an offer. After this, you will go through the VA appraisal and underwriting. VA appraisal is a requirement to ensure your property meets fair market value. After that, you’re ready to close the deal!
Get a VA Loan
VA loans are designed for military families to own a house. If you’re looking to settle down with some property to call your own, make sure you explore VA loans as an option because you will definitely save more. Get in touch with local real estate companies to learn more about your options and what you stand to gain from this type of loan!
The Desert Heroes Team is made up of skilled real estate professionals offering real estate services near Luke AFB. We help military families get the house of their dreams. Contact us today!