When you’re buying a home, it’s critical to consider all of your options for financing. And for many people, that means collecting as much VA loan information as they can find.
In this VA loan guide, we answer all of your questions to ensure that you secure the type of loan that’s best for you and your finances.
What Is a VA Loan? How Is It Different?
As noted by the U.S. Department of Veterans Affairs, a VA loan helps veterans, service members, and eligible surviving spouses purchase a home.
In a general sense, a VA loan is the same as a traditional mortgage: You borrow money from a lender and repay it based on their terms and conditions. The primary difference is that the VA guarantees a portion of the loan, which takes some risk off of the lender. At the same time, it provides you with more favorable terms.
Who Qualifies for a VA Loan?
As noted above, you must be a veteran, service member, or surviving spouse to qualify for a VA home loan. Eligibility is determined by factors such as when you served and the type of service.
For example, if you served between September 16, 1940, and July 25, 1947 (WW II), you need a total service time of 90 days (or less than 90 days if discharged for a service-connected disability). On the other end of the spectrum, if you served in the Selected Reserve or National Guard, you need a minimum of six creditable years.
What Is the Process for Getting a VA Loan?
Once you’ve determined your eligibility and are sure that you want to apply for a mortgage, it’s time to start the process. The first thing you need to do is obtain a Certificate of Eligibility (COE) through your lender, by mail, or through the online eBenefits system.
From there, basic steps include:
- Reviewing your finances for a better idea of how much of a mortgage you can afford
- Choosing a lender based on your research
- Choosing a real estate agent who has experience helping clients buy a home with a VA loan
- Shopping for a home, making an offer, and finalizing a deal
As long as you start by obtaining a COE, you’ll find yourself on the right path. From there, you can lean on your lender and real estate agent to guide you.
Things to Know About VA Loans If You’re Ready to Apply
If you think you know everything about VA loans, you’re likely to find that nothing could be further from the truth. The further you get into the buying process, the more you’ll realize that there are a lot of moving pieces.
Here are some basic things to know about VA loans if you’re ready to apply:
- You need a COE to proceed.
- A VA loan is not funded by the U.S. Department of Veterans Affairs, but instead a traditional bank or credit union.
- There is more than one type of VA home loan program.
- VA loans don’t generally require a large down payment (or any down payment in some cases).
- The fees associated with a VA loan may be lower than those of a conventional mortgage.
If you have any questions about securing a VA loan, the best thing you can do is consult with a qualified lender.
What Are the Repayment Terms Like?
There are three things you need to know about the repayment terms of a VA loan:
- Varying lengths: Just as with conventional mortgages, terms generally include 15, 20, and 30 years.
- Lower interest rates: VA loan interest rates are typically lower than those associated with conventional loans. This can save you a lot of money monthly as well as over the life of the loan.
- No prepayment penalty: Should you be interested in paying off your loan early, there’s no prepayment penalty associated with doing so.
How Can The Home Loan Expert Help?
Hero Loan, The Home Loan Expert’s VA Loan Program. At Hero Loan, it’s our goal to help veterans find the VA loan that best suits their personal and financial requirements. If you have any questions or concerns, review the VA loan information on our website for guidance. From there, you can connect with a loan officer and close your loan in as little as 14 days.