One of the most useful benefits of the military, a VA home loan offers a fantastic opportunity for eligible active-duty service members and veterans who are ready to become homeowners. Because the Department of Veterans Affairs guarantees VA loans, they lack down payment requirements and have lower interest rates than many other types of mortgages. For these reasons and more, they’re very popular amongst qualified military families. So if you’re a service member or veteran interested in buying or refinancing your home, we encourage you to learn how to apply for a VA loan. This favorable financing option could make your dream home a reality.
Discovering How to Apply for a VA Loan
Do you know how to apply for a VA loan? As Investopedia explains, the VA does not hand out money in the form of home loans. Instead, the organization runs a program intended to help current and former members of the military who qualify become homeowners by guaranteeing home loans that meet its requirements. Since this government backing reduces their risk, the private lending institutions that actually do provide the mortgages can offer better terms to eligible service members and veterans.
VA loans are not available to everyone. To qualify for a VA loan, you must have sufficient credit, suitable income, and a valid Certificate of Eligibility. How do you know if you qualify? The VA provides a chart detailing the eligibility requirements for VA home loans so that service members, veterans, and their spouses can see if they qualify for this entitlement.
The Benefits of VA Home Loans
Why are VA home loans so attractive to qualified families? There are many reasons. According to Zillow, using a VA home loan provides the following benefits:
- No down payment is necessary. With no requirement for a down payment, borrowers using a VA loan enjoy greater financial flexibility. In addition, since it’s not necessary to save a large sum first, you can start shopping for a home sooner than you might have expected.
- No private mortgage insurance is required. Because the VA stands behind the loan, no PMI is necessary, which can result in substantial savings every month.
- Interest rates are competitive. With various lenders providing VA loans, interest rates remain competitive. In addition, interest rates for VA loans are often lower than those for other loans because the VA’s backing of the loan reduces the risk to the lender.
- There is no prepayment penalty. With a VA loan, you have the option to pay your mortgage off early without being penalized by extra fees.
- VA assistance is available for borrowers in financial difficulty. If money troubles mean that you are temporarily unable to make your mortgage payments, the VA will help by providing financial counseling. It may also intervene with your lender to help prevent foreclosure.
How to Apply for a VA Loan
If you decide a VA home loan is your best bet, how do you proceed? Once you have verified that you are eligible, locate a lender that offers VA home loans. You may want to get prequalified, as this will give you a clear idea of how much you can afford to borrow. Next, request a Certificate of Eligibility. The exact nature of the evidence you’ll need to obtain this document varies depending on the length and character of your service, but the VA provides a convenient breakdown of the requirements for obtaining this certificate and instructions regarding how to apply for it here.
When you locate a home, it’s time to work with a real estate agent to draw up a purchase agreement. As the VA Loan News Blog indicates, you will need to be sure that the contract includes a VA Option Clause. Sometimes referred to as an escape clause, it allows a prospective buyer to withdraw from the contract without being penalized if the contract price exceeds the value of the property when the VA appraises it. Once you have a purchase agreement, you will work with your chosen lender to complete the application for your VA loan. As with any type of home loan, you’ll need to provide an assortment of documentation, including identification, bank statements, tax returns, and pay stubs.
With the application complete, the work of processing the loan begins. As the VA explains, the lender will order a VA appraisal of the residential property that you’re buying. Then, they will carefully weigh the information provided by the appraisal and your loan application in order to determine whether or not you will receive the loan. If the loan is granted, you will be able to move forward to the closing, where the seller will receive their funds and the property will be legally transferred to you.
If you’re ready to learn how to apply for a VA loan, find out if you’re eligible today by contacting PrimeLending: Manhattan, Kansas. Every year, we help thousands of veterans and active-duty members of the military buy or refinance their homes through the VA home loan program. With our assistance, you can take advantage of the many benefits of a VA loan while saving money due to our lack of lender fees. We offer 100% financing with competitive interest rates – no down payment or PMI required! To learn more, please give us a call at 785-560-3011 or contact us online. It’s our turn to serve you!