VA loans can be a good way for veterans to buy a new home. Veterans, active-duty service members, and their families can use VA loans to purchase new or existing homes with NO down payment. VA purchase loans also allow Veterans to buy single-family homes, condominiums, manufactured homes, multi-unit properties, and even new construction.
Policies and guidelines can vary by lender so make sure to talk with a First Veterans Mortgage Loan Officer to discuss your options.
The VA loan program has provided low-interest rate home loan solutions for Veterans and service members with favorable underwriting guidelines for generations. The core benefit of the program is built upon doing right by Veterans to honor their service and sacrifice for our country. Veterans have access to a home loan program with flexible guidelines and significant financial benefits, primarily the ability to purchase a home with no down payment.
Let's take a closer look at how VA loans work and what it takes to start the VA loan process.
While the VA loan is a federal program, the government generally does not directly make loans to Veterans. Alternatively, private lenders finance the loan while the Department of Veterans Affairs offers a guaranty.
This guaranty protects the lender against total loss should the buyer default, which provides an incentive for private lenders to offer the VA loan with better terms than other mortgage options.
Qualified veterans with their full VA loan entitlement can borrow as much as a lender is willing to extend, all without a down payment. The VA loan limits only come into play for buyers with less than their full entitlement, either because they have one or more active VA loans or because they've lost a previous one to foreclosure. Contact your First Veterans Mortgage Loan Officer to see how the VA loan limits might affect you.
Talk with a trusted lender that knows VA loans and how to get the most from this hard-earned benefit. The process typically starts with getting preapproved, which is a key first step before making an offer on your dream home. Having that preapproval letter gives you a clear sense of your buying power and shows sellers and listing agents you have what it takes to get to closing.
Yes, VA Loans are not limited to one-time use. Once you earn the VA loan benefit, it’s yours to use for the rest of your life. You can reuse the VA loan over and over again, and it’s even possible to have more than one active VA loan at the same time.
VA loans ensure the program keeps running successfully in the future by removing any additional burdens off taxpayers and Veterans. The VA Funding Fee enables this by going directly to the VA.
The fee varies depending on the borrower’s circumstances. For example, if this is your first time using the VA home loan program, the funding fee is typically 2.3 percent of the purchase price of the home. For subsequent use of your VA loan benefit, the fee is 3.6 percent. The fee for an Interest Rate Reduction Refinance loan is just 0.5 percent, no matter how many times you've used the benefit.
VA borrowers can roll the funding fee into their overall loan amount. The VA also limits closing costs for Veterans and allows sellers to pay most or all of those expenses. Many Veteran homebuyers can purchase a home with no money due at closing, but every buyer's situation is different, so make sure to speak to your First Veterans Mortgage Loan officer to discover your options.
The VA also exempts some Veterans and surviving spouses from the funding fee entirely. The most common exemption is for Veterans receiving compensation for a service-connected disability. Surviving spouses with VA loan eligibility are also exempt. Only the VA can make a determination about funding fee exemptions.
VA loans are arguably the most powerful loan option on the market for Veterans and their families. They come with a host of incredible benefits, including a $0 down payment, no mortgage insurance, flexible and forgiving credit guidelines, and some of the industry’s lowest average fixed interest rates.
Every Veteran buyer’s situation is different, and going over all of your loan options with a First Veterans Mortgage loan officer can help ensure you make the best financial decision possible.
