buying a home with little money in savings

What Every Armed Forces Member Should Know About VA Loans

by Fernando Moore

Are you currently a member or veteran of the US Armed Forces and potentially qualify for a VA loan? If so, you'll want to work with a real estate agent that is veteran friendly and can help guide you through the home buying process. It is a bit different than a conventional mortgage, with a few key differences that make a VA loan unique. 

The Main Benefits

Eligibility to receive a VA loan means that you can receive the many benefits it provides veterans. A huge benefit is that you do not need a down payment to purchase a home. This makes home buying more attainable for veterans, because you do not need to save that substantial upfront cost in order to get a loan.

VA loans are also known for having competitive interest rates. The terms will be very favorable to the buyers, which makes the monthly mortgage payment as low as possible. You also will not have to pay for private mortgage insurance (PMI), which is a requirement for conventional loans that meet low down payment thresholds. 

The Eligibility Requirements

There are a few requirements to receive a VA loan that you need to be aware of. The first one is the active service requirement, which for service members is 90 consecutive days. The requirement is a bit different for veterans, which depends on when you served. You'll also receive a certificate of eligibility from the VA to prove your eligibility status. 

While the credit requirements are lower for VA loans, they still exist and may disqualify you from getting a VA loan. Make sure that your credit history is within good standing according to the current requirements so that you do not run into complications later.

There are restrictions on the property that you can buy. While it must be your primary home, the property must also meet safety and health standards that make it a good quality home. Don't expect to be allowed to purchase a serious fixer-upper and use a VA loan.

The Loan Process

The process of actually getting a VA loan is very similar to a conventional loan. The first difference is the pre-qualification phase where your eligibility is verified. This prevents you from getting to the end and finding out that you do not qualify. There is also the approval of the desired home to ensure it meets the safety and health specifications.  

For more info, contact a local Veteran-friendly relator