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10 VA Loan Tips
More than 21 million Veterans live in the U.S. today, but only about 6% bought a home using a VA loan in the past 5 years. That percentage could be much higher.
1. Buy Now No Down Payment, No Mortgage Insurance.
The big advantages to a VA loan is no down payment. None whatsoever. With a VA loan, buyers avoid steep mortgage insurance fees. At 5% down, PMI costs $150 per month on a $250,000 home. With a VA loan, this buyer could afford a home worth $30,000 more with the same monthly payment, simply be eliminating PMI. A VA loan saves you money upfront and increases buying power.
2. Multiple Benefit Use.
A VA loan can be used many times if paid off.
3. VA Benefit Never Expires.
Once earned, eligibility never goes away. Eligibility is based on the length of time served, and the period in which you served. To check eligibility, first obtain a DD Form 214;which can be requested directly from VA’s eBenefits website
4. Surviving Spouses May Be Eligible.
More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2018 alone. Un-remarried spouses can buy zero & the funding fee is waived.
5. VA Loan Rates Are Lower.
VA loan rates are typically about 0.25% lower than conventional loans. The VA backs the mortgages, which have the lowest foreclosure rates of any loan type, making them a lower risk for lenders. Those savings are passed on to Veterans.
6. VA Loans Are Available from Local Lenders.
The VA loans available from private companies, not the government itself.
7. Buy, refinance or tap into home equity.
A VA loan can be used to refi an existing loan,whether or not it’s a VA loan. Homeowners with a current VA loan, can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal, or even pay stubs, W2s or bank statements. The VA streamline refinance, gives vets, a faster, cheaper way to access lower refinance rates when rates fall. A VA “cash-out refinance” can be used to turn a home’s equity into cash to pay off consumer debt, make home improvement etc. Many vets drop their rate & get cash out accomplishing two goals at once.
8. Lenient guidelines for lower credit scores, bankruptcy, foreclosure.
Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan. Many homeowners across the U.S., military and civilian, experience bankruptcies and foreclosures. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again. The exception, is a foreclosure involving a VA loan. A vet will need to pay back the amount owed on the foreclosed VA loan to regain eligibility.
9. Funding fee waivers.
VA typically charges a funding fee to defray the cost of the program. The fee is between 0.50% and 3.3% of the loan amount, depending on service history and the loan type. However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
10. Buy a condo with a VA loan.
VA loans are eligible for many types of properties including a single-family (free-standing) home, a home of up to 4 units, and manufactured homes. However, condominiums are commonly overlooked by VA home buyers. The VA maintains a list of approved condominium communities; and their association requirement are much easier than Fannie or FHA! It’s not a short list; there are more than 9,000 communities in California. Searches are by city, state, or condo name on VA’s condo search tool.
Unsure if you qualify or need help obtaining a VA loan? We can help! As certified referral agents assisting USAA homebuyers, we have lending partners that can get you into the home of your dreams with a VA loan and we have 5 strategies to save you upwards of $20K on the value of the home!
Call our 24/7 recorded hotline to learn more - 877-957-6677
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