Last Updated on April 14, 2021 by Maggie Looker
Are you a veteran who is considering buying or refinancing your home? As an active military member or veteran, there are certain benefits available to you from the U.S. government as an additional thank you for your service. There are some great options for veterans when it comes to selling, buying, and refinancing your home. One of these benefits is the VA Home Loan.
What Are Veteran Loans?
Veteran Loans are often called “VA Home Loans” because they are backed by the U.S. Department of Veterans Affairs (VA). VA Home Loans generally have lower interest rates and special clauses to benefit you, the veteran, and your family more than the loans accessible to the civilian population. These types of loans are given out by private lenders like mortgage companies and banks. The “guaranteed” part of the term means the lender has protection in the unfortunate event that you are later unable to repay the loan.
There are actually several types of VA home loans out there, and the type you choose will depend on your goals and unique circumstances. These are:
- Purchase loan – The most commonly used VA home loan
- Cash-out refinance loan – Similar to a traditional cash-out refinance loan
- Native American Direct Loan (NADL) – Intended to help Native Americans buy homes on Native American trust lands
- Interest Rate Reduction Refinancing Loan (IRRRL) – Used to refinance an existing VA loan at a better rate
Be sure to ask your real estate agent or mortgage specialist if you qualify for one of these programs too.
VA Home Loan Eligibility
How do you know if you qualify for a VA home loan? The Department of Veterans Affairs has very specific requirements for eligibility, mainly around dates and length of active duty. While length of active duty depend on when you served, most recent veterans can expect to have served at least 24 continuous months, with different lengths of active duty affected by hardship or service-connected disability.
There are also different requirements if you were an Officer, National Guard Member, or National Guard Reserve. Spouses of service members who died in the line of duty are also eligible with certain criteria. Here you can find the full list of Department of Veterans Affairs eligibility requirements.
You will also need to apply for a Certificate of Eligibility (COE) before you can apply for a VA home loan. The COE confirms to your lending agent that you are verified as eligible to receive a VA home loan.
Even with your Certificate of Eligibility in hand, you’ll still need to provide some additional information to satisfy your lender’s requirements and secure your VA home loan. Your real estate agent or lender will be able to detail all of the documents you’ll need to provide, but here are some of the most common:
- Certificate of Eligibility
- Bank statements
- Tax returns
Even though the VA determines the general guidelines for VA loans, private mortgage lenders may have additional conditions that borrowers need to meet to receive a home loan. Mortgage lenders may want to review your debt, debt-to-income ratio and credit conditions before approving any loan.
Homes for Heroes lenders are versed in VA loans, and know the process well. The benefit of your lender knowing the VA loan process added to the Hero Rewards you can earn from working with Homes for Heroes make it an easy choice to sign up. There is no obligation to signing up, just savings for you.
Save More: VA Home Loan AND Homes for Heroes Hero Rewards
In addition to the VA loan benefits, you can save even more money when you work with Homes for Heroes real estate and mortgage specialists to buy a home. The process is simple, there’s no obligation and Homes for Heroes offers the most savings of any national organization. In fact, military personnel save an average of $2,400 by working with Homes for Heroes. Almost all of our mortgage specialists and real estate agents are familiar with VA loans. If you combine the benefits of VA home loans with amazing Hero Rewards® from Homes for Heroes, you can save more money and purchase the perfect home for you and your family.
Benefits of VA Home Loans
VA loans occasionally can take a little bit longer to process because they are government backed. But don’t let a few extra days discourage you, because the advantages are more than worth the wait. Besides cost savings, here are some of the other benefits of VA home loans:
- No or low down payment required
- No private mortgage insurance
- VA rules limit your maximum closing costs
- No minimum credit score is required from the Department of Veterans Affairs (however, most lenders will have a minimum credit requirement)
- No penalty for paying your mortgage off early
- You do not have to be a first-time home buyer to use a VA home loan
- You can reuse the benefit as long as you sell the home you currently own
- VA home loans are assumable as long as the person assuming the loan also meets VA requirements
- There is no maximum loan amount. However, VA does limit its guarantee. Veterans can borrow up to $453,100 without a down payment in most of the country
While you are not required to meet any specific income scale to qualify for a VA home loan, you will need to prove that you have reliable, consistent income that is sufficient to cover your monthly expenses, including your mortgage. By making sure you have enough money for food, gas, clothing and other living expenses, the VA hopes to protect military members from overextending themselves and ending up in financial trouble.
When you add up all the potential savings and other benefits that can come from this type of loan, there are not many reasons not to take advantage.
VA Home Loan Calculator
If you’re not sure how much for a home you can afford, or what size of loan you need, there are a few ways to check! Your Homes for Heroes affiliate, any bank, or lender can do the calculations for you, which will be fairly accurate. These estimates will require hard numbers from real documents, like pay statements, W2’s, and credit reports. To get a very rough estimate quickly, you can use an online calculator. There are a few calculators like this one that will give you instant results as you change the numbers without any commitment or registration.
Ready to buy a house using a VA home loan and Homes for Heroes? Register with Homes for Heroes today and our specialists can take the pain out of the home buying experience and save you significant money in the process.