What is a VA loan?
The US Government's VA loan program helps veterans, active-duty service members and their families qualify for a home loan. Backed by the US Department of Veterans Affairs, VA loans feature no down payment or private mortgage insurance (PMI) requirements.
Are you qualified for a VA home loan?
A VA loan is a no-brainer for qualified homebuyers and refinancers. The intended candidate is a service member or surviving spouse with a clean financial record. Ask yourself these four questions to determine your status:
- Are you a current or ex-military personnel?
- Are you the surviving spouse of a current or ex-military personnel?
- Have you defaulted on a loan within the last 12 months?
- Have you declared bankruptcy within the last two years?
If you answered "YES" to either of the first two questions and a resounding "NO" to questions three and four, you are most likely qualified for a VA loan!
To be eligible, you must serve for 90 or more days in wartime or 181 or more days in peacetime. In both cases, the stipulation is waived if you are discharged due to a service-related disability. Reserves and National Guard soldiers must serve for at least 6 years to be eligible.
Spouses of deceased service members are eligible for VA loan benefits, provided they have not remarried and that the deceased either:
- Died in service or from a service-related disability.
- Was missing in action or a prisoner of war for at least 90 days.
- Was rated totally disabled and was eligible for disability compensation at the time of death.
Children of deceased veterans are not eligible for VA loan benefits.
The VA advantage
VA loans are fully backed by the government and offer a myriad of advantages for your home purchase or mortgage refinance. Here are the six biggest:
No money down
- With VA loans at or under the local conforming limit, down payments are an option—not a requirement. This amount is $453,100 for most of the country and as high as $679,650 in high-cost areas. The VA allows you to purchase jumbo loans, but requires you to supply 25% of the difference between the loan amount and the loan limit.
- PMI typically adds 0.2-0.9% of expenses to your monthly mortgage payments when you put less than 20% down. With a VA loan, you can wave goodbye to PMI!
Fewer credit restrictions
- Reduced restrictions mean easier qualification. With a VA loan, you’re allowed a higher debt-to-income ratio and afforded more leniency with your credit score.
- The VA allows sellers to assist with up to 4% of closing costs.
- Borrowers can refinance their homes with a VA streamline or cash-out loan. The streamline version lowers the mortgage rate of an already existing VA loan, usually for less than the current principal and interest. This means it doesn't require a credit check or appraisal. The cash-out option involves a credit check and appraisal, since the home’s value represents the maximum loan amount and the new loan will be larger than the existing loan.
- The VA allows for new construction loans and increases to purchase loans for renovation projects. The VA’s Energy Efficiency Improvement program lets borrowers add up to $6,000 to their home loan amount to install solar heating, insulation, storm windows and more.
Are you qualified for a VA home loan?
At Guaranteed Rate, the wellbeing of US vets and active duty personnel is our top priority. From coast to coast, our Home Purchase Experts have the experience, technology and personal touch to help you find a great loan at a low rate. Apply now—we’d love to help you find a VA loan for your dream home!
Guaranteed Rate, Inc. is a private corporation organized under the laws of the State of Delaware. It has no affiliation with the US Department of Housing and Urban Development, the US Department of Veterans Affairs, the US Department of Agriculture or any other government agency.
Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply, contact Guaranteed Rate for current rates and for more information.
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*Waived lender fees available for VA loans that have a triggered RESPA app date as of May 1st, 2018 through June 30th, 2018 at 11:59pm EST. RESPA is a federal statute to clarify and outline the settlement process and fees to borrowers and to mandate that all parties fully inform borrowers about all closing costs, lender servicing and escrow account practices, business relationships between closing service providers and other parties to the transaction. Not all borrowers will be approved. Borrower’s interest rate will depend upon the specific characteristics of borrower’s loan transaction, credit profile and other criteria. Contact Guaranteed Rate for more information and up to date rates.