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VA Loans

VA loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy.

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To get a VA loan, a veteran must apply to a lender. If the loan is approved, VA will guarantee a portion of it to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms.

VA Home Loans

There is no maximum VA home loan but lenders will generally limit VA home loans to $240,000. This is because lenders sell VA home loans in the secondary market, which currently places a $240,000 limit on the loans.

For VA home loans up to this amount, it is usually possible for qualified veterans to obtain no down payment financing. A veteran's basic entitlement is $36,000 (or up to $60,000 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran's available entitlement without a down payment, provided the veteran is income and credit qualified and the property appraises for the asking price.

VA Mortgage Loan

VA Mortgage Loans offer the following important features:

Equal opportunity for all qualified veterans to obtain a VA mortgage loan.
No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
Buyer informed of reasonable value.
Negotiable interest rate.
Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
Closing costs are comparable with other financing types (and may be lower).
No mortgage loan insurance premiums.
An assumable mortgage.
Right to prepay without penalty.
For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
VA assistance to veteran borrowers in default due to temporary financial difficulty.

VA does not do the following:

VA cannot guarantee that a veteran is making a good investment.
VA cannot provide a veteran with legal services.
Guarantee that a home is free of defects. VA guarantees only the VA mortgage loan. It is the veteran's responsibility to assure that he/she is satisfied with the property being purchased. The VA appraisal is not intended to be an "inspection" of the property. A veteran should seek expert advice (a qualified residential inspection service), as necessary, BEFORE legally committing to a purchase agreement.
If you have a home built, VA cannot compel the builder to correct construction defects although VA does have the authority to suspend a builder from further participation in the VA mortgage loan program.

Veteran Home Loan

How does a veteran guarantee a Veteran Home Loan?

Contract to purchase: Veteran selects home and discusses purchase with seller or selling agent and signs purchase contract conditioned on approval of a Veteran Home Loan.
Veteran Home Loan application: Veteran selects lender, presents Certificate of Eligibility, and completes loan application. Lender will develop all credit information and request VA to assign a licensed appraiser to determine the reasonable value for the property. Veteran will pay for credit report and appraisal unless the seller agrees to pay. Either VA or the lender will issue a value for property for loan purposes based on the appraisal.
Veteran home loan decision: If the established value is acceptable to all parties and the lender develops that a veteran is credit and income qualified, the veteran home loan may be approved. Most lenders are authorized to make this decision.
Veteran home loan closing: Veteran (and spouse) attend the loan closing and sign the note, mortgage, and other related papers. The lender or closing attorney will explain the VA home loan terms and requirements as well as where and how to make the monthly payments. When the loan is reported to VA, the Certificate of Eligibility is annotated to reflect the use of entitlement and returned to the applicant. (The veteran home loan closing procedure may vary in some states.)

For more information and to get the VA home loan process underway, simply fill in the questionnaire below.

VA Home Loan Rate

The home loan rate on VA loans can be negotiated based on prevailing rates in the mortgage market. Once a VA loan is made, the VA home mortgage loan rate set in the note will stay the same for the life of the loan.

However, if VA home loan rates go down, and you still own and occupy (or previously occupied) the property securing a previous VA loan, you may apply for a new VA loan to refinance the previous loan at a lower VA home loan rate without using any additional entitlement.

Va Funding Fee

A VA funding fee of 2.00 percent of the loan amount (2.75 percent for reservists) is also payable at the time of loan closing. This fee may be included in the loan and paid from the loan proceeds.

The VA funding fee does not have to be paid by veterans receiving VA compensation for service-connected disabilities, or who but for the receipt of retirement pay would be entitled to receive compensation for service-connected disabilities, or surviving spouses of veterans who died in service or from a service-connected disability.

If the veteran makes a down payment of at least 5 percent, but less than 10 percent of the purchase price of the property, the VA funding fee is reduced to 1.50 percent of the VA house loan amount (2.25 percent for reservists).
If the veteran makes a down payment of at least 10 percent, the VA funding fee is reduced to 1.25 percent of the VA house loan amount (2.00 percent for reservists).
If a veteran who has previously obtained a VA home loan obtains another loan with less than a 5 percent down payment, the VA funding fee is 3.00 percent of the VA house loan amount.

With a down payment of at least 5 percent, the VA funding fee is reduced to the percentages shown above for downpayments of at least 5 percent, but less than 10 percent, and for down payments of more than 10 percent.

VA Home Loan Refinance

What can a VA Home Loan be used for?

To buy a home, including townhouse or condominium unit in a VA-approved project.
To build a home.
To simultaneously purchase and improve a home.
To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing VA home mortgage loan may not exceed 90 percent of the appraised value plus the costs of the improvements. Check with a lender or VA for details.
To refinance an existing VA home mortgage loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.
To buy a manufactured home and/or lot.

Visit www.homeloans.va.gov for more information on Veteran Home Loans and VA Home Loan Refinancing.

If you are a veteran or active duty military personal you may be eligible to receive VA Loans, a VA House Loan or VA Mortgage Loan with little or NO down payment. This is just one more way that our loan company makes loan and mortgage shopping safe, friendly, and secure right from the start. Take advantage of the VA Loan Rate today!

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