VA Home Loans
What is a VA Loan?
The VA home loan program was created in 1944 as a part of the GI Bill of Rights, signed into law by President Franklin D. Roosevelt. VA loans are designed to provide the men and women who have served our country in the military with federally-guaranteed home loans. VA Loans are eligible for
wartime/conflict veterans, peacetime veterans, and Reserve and National Guard veterans.
Benefits of a VA Loan?
There are many cost-saving advantages to purchasing a home with a VA loan, making homeownership possible for many individuals who may not normally be eligible.
1.
Competitive Pricing
VA loans traditionally have lower interest rates than other loan types with ability to access lender credits for closing cost assistance.
2.
No down payment
VA loans allow for 100% financing with no down payment, no private mortgage insurance (PMI), and no penalties for prepaying the loan. This entitles current and former military members to a lower barrier of entry to homeownership.
3.
Flexibility
The underwriting process allows for more flexible and forgiving debt-to-income ratio requirements, potentially resulting in an easier qualification.
VA Loan Characteristics
Down Payment: Generally, zero down payment is required depending upon the VA entitlement amount. The Certificate of Eligibility from the VA will state how much a borrower is entitled to.
Funding Fee: Depending on disability status, a borrower may need to pay a funding fee which is financed into the loan amount. If you are considered disabled by the VA, you are exempt from the funding fee.
Loan Options: There are fixed rate or adjustable rate options in loan terms ranging from 10, 15, 20, 25, and 30 years based on your specific goals and needs.
Property/Residency Types: VA loans allow for primary residences only for 1-4 unit dwellings.
Mortgage Insurance: No mortgage insurance is required.
Insured: The VA does not originate loans, but insures loans made available to current or former military. The VA guarantees loans originated by the lender to give veterans better rates and terms.
Ideal Candidates for a VA Loan
Borrower: Current and former military members that are deemed eligible through the VA can pursue a VA loan. A spouse is also eligible to be on the loan.
Credit score: Minimum credit score is usually 620 (depending on the lender) but some lenders will allow for a score down to 580.
Documents needed: Certificate of Eligibility (if already obtained) or a DD214.
Next Steps to Getting a VA Loan:
If you believe you are eligible for a VA loan, the next step will be booking an appointment with Desert Canyon Mortgage to start the homebuying process. We recommend reviewing our homebuying timeline and pre-approval document checklist before making an appointment. Once complete, click HERE to start the loan application process.
