Buying a House with a VA Loan

Getting a VA loan does have its advantages. If you qualify for this type of loan, have your loan officer run the numbers for your mortgage without having the Veteran's Administration's backing and then with it. The fact is that you will likely save money by securing this type of loan over any other type. This is especially true if you plan to purchase a home without any money down on that purchase price.

The fact is that people across the country are qualifying for a home loan with the help of the Department of Veteran's Affairs. In fact, during the 2006 to 2007 fiscal year, some 485,000 plus home loans were established as VA loans. That totaled more than 60 billion dollars worth of loans all backed by the federal government.

The question to ask, then, is what a VA loan is. This type of loan can offer you a guaranteed status, which means that to the lender you will not default on the loan. This provides more security to the lender and therefore they are more likely to offer you a lower rate. These loans are only given to those that have served in the military in some form, or are or were reservists or members of what is called the Public Health Service. There are very restrictive requirements for who is eligible for these loans, which your mortgage lender can help you to determine down the road.

There are several benefits offered through these loans, all of which make the VA loan one of the best types on the market today. Here are some of those benefits.

• There are no PMI payments with these VA loans. PMI, or Prime Mortgage Insurance, is required by most homeowners to be paid every month with their mortgage payment until they have paid a portion of the home off. This insurance can be costly, at the rate of $40 to $65 per month. With VA loans, you do not have to pay this.

• There is no down payment required at the time of purchase for your home. This really opens the door for most borrowers because they do not have to have the estimated 20 percent of the home's value in cash to pay down.

• The federal government strictly controls these loans including which lenders can offer them. Most are able to do so, but they must follow strict guidelines to maintain eligibility. More so, the federal government also regulates just how much can be charged to you as closing costs as well as origination fees. These aspects also lower your costs in purchasing the home.

Those considering a VA mortgage loan will need to talk with their lender about the requirements for securing these. You will need to show proof that you are eligible through a VA Certificate of Eligibility, which they can help you to obtain. The VA home loan is an ideal choice for many Americans that want to purchase their first or additional homes up to $417,000. Talk to your lender to determine if they do, in fact, offer this type of loan and how you can qualify for it.

The VA loan, or Veteran's Administration loan, allows those that have served the United States an opportunity to purchase a home. To qualify for this type of loan, there are several considerations that must be kept in mind. These stipulations may seem confusing, but your loan officer can help you to work through them so that you can qualify for the VA loan faster.

Basic Rules Of Eligibility

One of the first rules that define whether or not you are eligible for the loan is your military history. You must have served in some capacity of active duty in a branch of the military. This can be in the Coast Guard, the Army, the Marine Corp, the Air Force or the Navy. In addition, you must have been discharged without being discharged dishonorably. With that, you must have been active for 90 days or more of which any amount of that time happened during wartime. Alternatively, you served more than 181 days or more during peacetime.

In addition to this, there is a two year requirement for some. For example, if you were enlisted and your service started after September 7, 1980 or you held the title of officer and your service began after October 16, 1981, then the rules are a bit different. You must have done one of the following things to be eligible for these veteran's benefits. You needed to serve 24 months continuously. Or, you served all of the required period for which you were ordered that is not less than 90 days of which part of that was wartime or 181 days continuously during peacetime.

Additional Eligibility Options

Others are eligible for these veteran's benefits as well. If you were discharged because of a disability that is the result of your service or discharged because of some type of hardship, then you too may qualify for a VA loan. Those that are discharged due to a convenience of the government, after serving at least 20 months of their two year enlistment also qualify for this loan. Other qualifications also exist for many of those that have served or are serving today. Because many of the VA home loan requirements are so difficult to wade through, it is helpful to find a specialized lender that offers veteran's lending help specifically.

For Those Still Serving

The government wants to provide you and your family with the home that they need which is why currently serving military personnel can qualify for a VA loan. To determine what your VA loan eligibility is, consider these elements:

• Are you on active duty now?
• Have you been actively service for at least 90 days?
• Do you have wartime active duty? If not, once an end date for the Persian Gulf War is listed, you will need to have served at least 181 days continuously on active duty to qualify for the 181 requirement for a VA loan.

For those that are members of the reserve, there are options for you too. If you are a member of the Selected Reserve of the Ready Reserve, or of any component of these units, then you too many be eligible for a VA loan. You must be active in paid training and serve your active duty training period each year to qualify.

These VA home loan basics are flexible in that a person to person consideration is done. VA loan eligibility is based on if you are an active duty, if you served long enough, and if you left on good terms.

VA Certificate Of Eligibility

Before you can apply for and secure a VA loan, you will need to have a VA Certificate of Eligibility which states your military history. Your loan officer can help you to secure these forms and can help you to determine if indeed you do qualify for these loans.

You qualify for a VA home mortgage loan. What can you use it for? Perhaps you would like to purchase your first home, start a family and build the life you have been dreaming about. Or, perhaps you are considering your current home and wondering if you can sell it to purchase another. Maybe it is time to start thinking about updating your kitchen and you would love to pull some equity out of your home to allow you to do the repairs that you need. You are retiring and dreaming of a second home that can perhaps provide you with a warmer place to spend the winter months. VA home loans can offer you all of these benefits.

The VA loan is designed to help those that need the funds. It often works best for those that may have a lower income or those that have a rather challenging credit score, within the limits. What's more, it helps individuals to get the funds they need for a home without having to make a significant down payment on their home's purchase. Yet, even with this consideration, you can use it widely for your needs in second homes, refinancing your current mortgage loan and purchasing your home. If your credit history is excellent and you have a solid history of employment, some other types of loans may work well for you too. Compare your options to know which is best for your needs.

If you already have a VA home mortgage loan, you can also secure a refinance of that loan to get a lower interest rate. Or, if you have a conventional style loan but qualify for a VA home loan, then you may also be eligible for a VA refinance home loan. If you have equity that has been built up into your home, you can refinance your current VA home loan or conventional loan into a new VA mortgage to get those funds out to use as you need to. There are many opportunities for those that need them.

The key thing to remember about VA home loans is that you can use them for anything from a mobile home to a vacation home to your first home, as long as you meet the lender's guidelines. Specific guidelines and restrictions are put on these lenders for you, which helps more veterans to qualify, but you must still meet them to get the loan you need. If you do, chances are excellent that you will find yourself with an affordable home and an outstanding interest rate, terms and fees for your VA home mortgage loan.

The VA home loan process is pretty simple, uncomplicated and very similar to the conventional loan process. Other than requiring the Certificate of Eligibility (COE) and a home appraisal from an appraiser assigned by the VA the loan process should not be a deterent to moving forward with the purchase of your home. There are five basic steps you should follow:

1. Obtain your COE. In many cases your lender can obtain your COE from the Automated Certificate of Eligibility System (ACE).
2. Work with your real estate agent to find the home you wish to purchase.
3. Choose your VA Lender, provide them with your COE and complete the loan application.
4. Have the home appraised by the VA assigned appraiser. Lenders can than approve your loan if you meet their requirements.
5. Close the VA home loan and move into your new house.

With the limited amount of "red tape" involved the VA home loan process should be easy and relatively pain free.

The VA loan programs offered through qualified VA lenders and guaranteed through the US Department of Veterans Affairs offer a great opportunity for our veteran and active military personnel to purchase or refinance their home. In most cases, these loan programs offer the opportunity to purchase a home with no money down and with a better interest rate than a conventional mortgage. If you are a veteran or are currently active in the service and you are considering purchasing or refinancing a home you need to consider a VA Loan.