If you are a veteran of the United States Armed Forces, an active duty servicemember or an eligible surviving spouse of a veteran, you may be eligible for a Veteran Affairs (VA) home loan. A VA home loan has advantages over a traditional loan that may help you become a homeowner. VA home loans are provided by private lenders and according to the website, benefits.va.gov, the United States government guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.
Eligibility
Wondering if you are eligible for a VA home loan? Start with a VA-approved lender. He/she will help you apply for your Certificate of Eligibility (COE). Qualifying for a VA loan will depend on your service history and duty status. Once you have your COE, the process will go smoothly.
Advantages of a VA Home Loan
According to mortgagereports.com, "the VA loan asks for no down payment, requires no mortgage insurance, and has lenient rules about qualifying, among other advantages." The VA home loan is a true "no money down" home loan opportunity. Private mortgage insurance (PMI) is usually required with other loan programs when a buyer's down payment is less than 20% of the home's value. PMI protects lenders if homeowners default on their loans. With the VA loan, it comes with a government guarantee. This appeals to and protects lenders, making it a favorable loan program. VA home loan programs often have lower interest rates than other home loan programs. Assuming you qualify for a VA loan, it's easier to qualify for a VA home loan than a traditional loan as their guidelines for credit scores and income tend to be more flexible. Closing costs are lower with VA home loans and there is no prepayment penalty with a VA home loan; they are also assumable when you sell.
Ancient History
In the past, VA home loans had a bad rap as they used to take 40 to 50 days to close. Today, once you have your COE, you can close in as little as 21 to 30 days. VA loans used to make sellers liable for extra closing costs. Sellers used to be leery of the VA inspection as it's really more of an appraisal and shouldn't be construed as a home inspection. The VA inspector however does look to make sure the major components of the home are in working order, such as the furnace, hot water heater and so on. Since VA home loans are government-backed, they portray VA homebuyers as financially solid buyers.
Today's Seller's Market
Inventory of available homes for sale is historically low. Sellers are receiving multiple offers on their homes as home values are rising. This can make buying a home a more challenging time for any buyer so find a VA-friendly Realtor to help. Compare possible candidates on websites such as homelight.com or upnest.
VA home loan buyers need to follow the same guidelines as other buyers in today's market. This includes offering a competitive price for the home, which may mean offering full price or above full price. As with any loan program the home has to appraise in order to be financed. Buyers should offer the sellers the most appealing terms as well. Let the sellers choose a convenient closing date. Show the sellers that you are financially strong by offering earnest money to show how serious you are. Only ask for personal property that the seller plans on leaving with the home.
The VA home loan today is a strong and solid way to purchase a home. Veterans and servicemembers deserve to live the "American Dream" of being homeowners. Talk to your VA-approved lender, find a VA-friendly Realtor, purchase a home and watch your home value rise.
