If you are a veteran or have served in the military, this type of loan may be the best choice for you. A Veterans affair home loan is essentially a mortgage loan that is supported by the Department of Veterans Affairs (VA) for the people that have served, are currently serving, or spouses of those who have served in the US Army. Remember that the VA is NOT the entity responsible for lending the veterans – there are private lenders but they are guaranteed by the department to ensure that these loans are paid off in the future.
There are three types of VA loans, and they are the following: purchase loans, cash-out refinance loans, and streamline refinance loan.
A purchase loan is the loan that is needed to purchase a home – these loans can be attained with no down payment needed.
Cash-Out Refinance Loan
Next, we have the cash-out refinance loan. This type of loan allows you to have access to cash if and when needed. For example, you would like to make some improvements to your home. With the cash-out refinance loan, you can borrow money in order to make those improvements.
Streamline Refinance Loan
Lastly, the streamline refinance loan allows you to refinance your payments in order to lower your monthly interest payments. This loan is also known as the Interest Rate Reduction Refinance Loan or IRRRL. It is important to note that only those that have an existing VA loan are eligible for this loan.
While there are a lot of benefits with a VA loan, the biggest, and perhaps, the best benefit of them all is that no down payment is needed when purchasing a home. Because of this, active military men or veterans can purchase a home with ease. After all the service that they have done for the country, they deserve nothing but the best.
To be considered eligible for the VA loan, you need to have the following: good credit, stable and sufficient income, and a valid VA Certificate of Eligibility (COE) that will qualify you for a VA guaranteed home loan. There are many benefits to the VA loan such as a competitive interest rate, lower closing costs, the seller may pay the closing costs, the VA rules limit the amount needed to pay for closing costs, and many others.
As mentioned above, though, the best benefit of a VA home loan is that it does not require a down payment. In addition to that, you do not need to pay for mortgage insurance with a VA loan. With a conventional loan, however, you do – this will lead you to spending a small amount to pay for your mortgage insurance per month. If you are able to save all that money, though, imagine how big your savings would be over time.
As for the fees needed to pay to obtain a VA loan, it is generally lower as compared to getting conventional mortgages. However, the fees will be determined by the type of veteran or military servant that you are and the down payment you are willing to put up.
As the Department of Veterans Affairs is taking a risk on trusting you, you will have to meet some of their requirements. Firstly, a 620 credit score and above is helpful as it helps private lenders determine whether or not they are comfortable with lending you the money. Though it is not considered an actual requirement, most lenders do look at your credit rating – and it has to be good in order for them to trust you. In addition to that, they must show that they have good, sufficient income and should not have a debt that is considered excessive.
If you are one that is eligible for this loan, then we highly suggest that you go for it as it is time to live a peaceful and harmonious life. All you need to do is to follow the necessary requirements and you will find yourself with a home of your own in no time.
Learn about VA home loans at www.vairrrlrates.co. Find out if you are eligible, know the interest rates, and more through the guidance of our team of experts.