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If you’re a veteran or currently serve in the military, you may be eligible for one of the best home loan options out there: A VA home loan. Not only can you get a loan with no down payment, but you’ll get access to flexible VA home loan requirements, too.
Many people wonder, “What are the requirements for a VA home loan?” Some people assume the mortgage program is too strict or expensive, and they bypass it altogether. But the thing is, a VA loan can provide you with the funding needed to buy a home without the hassle.
Here are 10 things you must know about VA home loan requirements to see if it’s right for you.
There's No Down Payment
Veterans have the benefit of securing 100% financing—that means no down payment. Many would-be homebuyers struggle with saving enough for a down payment. But a VA loan is a great way to get into a home without waiting until you have the money to put down. This works to the advantage of veterans just leaving the military or those who currently rent and don’t have enough cash on hand to cover the rent while also saving money for a down payment.
You Don't Need Mortgage Insurance
Most loans require mortgage insurance if you put less than 20% down. Conventional loans require Private Mortgage Insurance until you owe less than 80% of the home’s value. And government-backed loans, like FHA and USDA loans, require mortgage insurance for the life of the loan. However, the flexible VA home loan requirements don’t charge mortgage insurance.
VA Loans Have Lower Interest Rates
Veterans deserve many benefits for their service and sacrifice. And lower interest rates are just one of the ways the VA rewards you. That’s right, VA loans have some of the lowest interest rates in the industry. That’s just one more reason to take advantage of your VA home loan options.
You Can Buy, Refinance, or Tap Into Home Equity
VA loans are great for buying a home. But that’s not all they’re good for. You can also use a VA loan to refinance your existing mortgage or tap into your home equity with a cash out refinance.
All VA loans have flexible guidelines making it easy to get what you need for your home.
Whether you want to buy a home for you and your family, refinance to take advantage of today’s low rates, or use your home equity to renovate your home or pay for other large expenses, there's a VA loan for that.
VA Home Loans are Available from Local Lenders
You don’t get a VA loan from the VA. Instead, VA loans are available from local lenders in your area. Because the VA doesn’t get involved in the underwriting or funding of your loan, you need to know what VA lenders look for and go through a bank or other mortgage lender to get financing. As long as you have your Certificate of Eligibility (which we can help you with), that’s all you need to get started.
You May Qualify Despite Foreclosure or Bankruptcy
Have you had a foreclosure or bankruptcy? If so, you’re probably asking yourself, “What are the credit requirements for a VA home loan?”
The good news is that flexible VA home loan requirements allow you to get approved with a recent bankruptcy or foreclosure. You can also get one with a lower credit score. The VA doesn’t set minimum credit score requirements or have specific credit history stipulations you must meet. However, lenders set their own guidelines. They may have VA home loan employment requirements and credit requirements to meet.
They Come with a Mandatory Fee
While you won’t pay mortgage insurance, you’ll pay an upfront fee called a “funding fee” when using a VA loan. There are a few exceptions. For instance, you won’t need to pay the funding fee if you’re:
- Receiving (or entitled to receive) compensation for a service-connected disability.
- A widow of a veteran who died while serving or from a service-connected disability.
- Still active-duty and received a Purple Heart.
Your Benefit is Reusable
Your VA loan benefit never expires, and you can reuse it. What does that mean? It means that if you use your benefit to buy a home, but then you sell the house and pay off the loan, you can use your benefits again. You can do this as many times as you want in your lifetime.
Your Surviving Spouse Could be Eligible
Your access to a VA home loan doesn’t stop with you. If you lose your life in the line of duty or as a result of an injury or illness from your time on duty, your surviving spouse may be eligible to use your VA home loan benefits. They may even be exempt from paying the upfront funding fee.
Only Certain Types of Homes Qualify
The VA is flexible with a lot of things, but there’s one thing that isn’t flexible- VA home loan property requirements. That’s why you must use your VA loan to buy your primary residence. It can’t be a rental, vacation home, or investment property.
As long as it’s your primary residence, you can use the loan to buy a:
- Single-family home
- Condo
- Townhome
You may even use it on manufactured or modular homes. Keep in mind you’ll run into VA manufactured home loan requirements, such as making sure it’s permanently affixed to the ground.
There are Many More Reason to Love a VA Home Loan
These are only 10 reasons to love a VA home loan, but there are many more benefits.
So, how hard are VA loans to get? They’re more accessible than you might think. If you’re a veteran or currently serving in the military, let Good News Lending show you just how beneficial a VA loan can be and how easy the VA home loan requirements are to meet.
