Created in 1944, VA loans are aimed at offering military personnel great convenience while they are purchasing homes. They allow people to purchase a property with no down payment and low amortization rates. What’s more, usually the fixed interest rates for VA loans are more favorable than those conventional mortgage rates.
What is a VA Loan?
A VA loan is a typical mortgage loan program warranted by the Department of Veterans Affairs in the year of 1944. It was set up to provide veterans and other military personnel with financial assistance to purchase properties for their own personal occupancy. A VA loan is usually made by the private lenders, and the private lenders can be banks, mortgage companies and other organizations.
Now, the VA loan has become one of the most flexible and powerful lending options in the United States. Unlike other loans, it ensures that the lenders would gain some repayment at any time, even when the borrowers fail to repay the loan. With a VA loan, people can receive favorable financing terms via a zero down payment.
Who Can Apply for a VA Loan?
A VA loan is specially designed to offer assistance for eligible American veterans and military personnel. Qualified VA loan borrowers include:
Veterans who have served on duty during WWII and later periods. These veterans should not have any dishonorable conditions.
Veterans who have served during Korean conflict and Vietnam era must have at least 90 days’ on duty service.
Veterans and military personnel who have served only during peacetime periods must have at least 180 days’ active service.
Reservists and National Guard members who have completed at least six years of service in the National Guard or reserves.
Some surviving spouses for veterans (provided they do not remarry).
How to Get a VA Loan?
To apply for a VA loan, you must own a veteran’s certificate of eligibility or a VA-assigned appraisal. If you do not have one, just apply your certificate from VA Form 26-1880, Request for Determination of Eligibility, Available Loan Guaranty Entitlement or the local VA offices. To apply a certificate, you must submit your request along with the proofs of your military service.
Except for the veteran’s certificate, you also need some other necessary information for the application:
1. Your social security numbers.
2. A sum of your monthly pay.
3. Names and addresses of your employers during the past years.
4. Fixed residence address for the past two years.
5. Detailed information for all your checking and saving accounts.
6. Specific information for all your open loans.
7. Assessed value for your personal property.
The identity theft prevention experts recommend that you always be cautious when giving out personal information like this, especially if you’re filling out a VA loan application on the internet or sending it in through postal mail.
Here are some basic steps to apply for a VA loan:
1. Firstly, you will need to find out the house you want to buy and then complete a purchase agreement.
2. After you sign the purchase agreement, you can ask for the appraisal from VA offices. Actually, most local VA offices provide “speed-up”telephone appraisal systems. What you need to do now is calling your nearest VA office for detailed information.
3. Then you need to apply to a mortgage lender for the loan. Usually, your loan can be approved or closed directly by the authorized lender. But if your loan has to be ratified by the VA office, the lender will wait for the VA’s review first.
4. If your application is approved by both the VA office and the lender, you will successfully get a VA loan. Just move to your new house with $0 down payment and enjoy a new life!
Brief Overview on VA Loan
Specially designed for American veterans and military personnel, VA loan comes with more benefits and bonuses compared with other types of mortgage loans. However, VA loan has more limitations and requirements on its applicants as well. That is, it is not accessible to all the veterans and military members. If you meet VA loan requirements, you are able to take advantage of the following favorable advantages:
• Zero down payments to purchase new homes. VA loans help people to purchase new houses and properties with no down payments.
• Low interest rates. VA home loan rates are usually lower than the market rates. Besides, VA is a fixed rate mortgage loan. So, your monthly payments will never increase during the term.
• No prepayment penalty. For other loans, people may pay for some penalties if they want to pay off the entire loan before the term ends. But VA loan does not have this requirement. You are free to pay off your debts at anytime.
To get a VA loan, you should get the VA loan certificate of eligibility first. A VA certificate of eligibility can be obtained from local VA offices. Just send them your application as well as some required evidences, you will get the certificate. Then you are able to apply for a VA loan under the proper VA loans guidelines.
Take Advantage of Exclusive VA Loan Benefits
To help veterans start and build their own businesses, the U.S. Department of Veterans Affairs makes huge efforts to provide financing and start-up assistance. One of the great benefits for veterans is the VA business loans and grants.
Well, the business loans and grants are truly useful in helping veterans start or expand a business. But not every veteran desperately needs financial assistance for startup business. Many of them are even homeless now. VA home loans are what they need most. A VA-backed home loan allows veterans or their dependents to buy a house with low or no down payment. However, all veterans must meet the VA home loan qualifications to obtain a VA loan.
If you’re eligible to a VA loan, VA loan application must be what you’re most concerned about. Fortunately, the application process is quite simple. You just need to prepare required documentation and submit your application to potential lenders.