How a VA Loan Can Help You Be a First Time Homebuyer
It stands to reason that those who are willing to lay down their life for our country should receive something in return for their service, especially if there are physical, mental, and/or emotional repercussions for having served. To that end, the VA loan program seeks to provide eligible veterans with a home loan that has reasonable rates, in the hopes that everyone who serves our country has a place to live and can claim the status of being a homeowner. In its lifetime, the VA Home Loan has helped over 20 million veterans become homeowners — both as first time homeowners and previous homeowners. There are many different benefits to applying for a VA home loan, such as the benefits of VA loan closing costs. And, it’s possible to qualify if you’re still on active duty or if you were married to a service member. Let’s talk more about the VA home loan, its benefits, and how to apply.
How Did The VA Home Loan Get Started?
The VA Home loan was a program started under the Servicemen’s Readjustment Act, which was passed by Congress in 1944. In 1970, the Veterans Housing Act got rid of termination dates that would prevent veterans from applying for housing loans and allowed VA-guaranteed loans for mobile homes. In 1978, the Veterans Housing Benefits Improvement Act continued to improve veterans’ housing benefits and in 1992, Reservists and National Guard members were included for eligibility.
The VA loan is backed by the United States Department of Veterans Affairs, which allows for such excellent mortgage rates and financing options. With the loan, you can buy new homes, condos, manufactured homes, multi-unit properties (though you must live in one of the units), or start building your own home. You may also use the loan to improve your own home or modify it to accommodate disabilities.
What are the Benefits of the VA Home Loan?
Mortgage rates with a VA home loan are as many as 50 basis points lower than those offered with conventional mortgage loans. You also don’t need mortgage insurance with a VA loan and you can get 100% financing. Obtaining a VA loan also means you can qualify for a loan amount much higher than conventional loans and you often don’t need to put down a down payment.
There are also benefits of VA loan closing costs, which can make a real difference. There are limited options in terms of the closing costs that need to be paid with a VA loan, so you save money when you go to close. You’ll still need to pay for a credit report, the title insurance, the origination and recording fee, and a survey, but you won’t need to pay for other costs like Escrow, an attorney, or processing.
Speaking with your loan officer about the benefits of VA loan closing costs can be a good move to better understand what you owe and what you don’t need to worry about.
How Do I Apply For the VA Home Loan?
You’ll need to make sure that you’re eligible for the loan first. Generally, you need to have served 181 days in peacetime or 90 days during war time. If you have served for six years in the Reserves or National Guard you are also eligible. And, if you were married to a service member killed while serving, you could also be eligible for a VA home loan.
You’ll also need to seek out a lender that works with the VA program, obtain a Certificate of Eligibility, and purchase the home. Once you have the purchase agreement, it’s time to apply. You’ll need the last two years of your W2 statements, the last two pay stubs, paperwork showing your other assets, and your DD 214. Once that paperwork is submitted, you’ll need to wait for approval, before moving on to closing.
The benefits of VA loan closing costs and the other benefits VA loans provide can be huge assets to veterans. Take advantage of these benefits now and look into seeing how a VA loan can help you find a home today.