Am I Eligible for A VA Loan?
- IFThey served a minimum of 90 consecutive days in active service at a time of war
- ORThey served a minimum of 181 days of active service during a time of peace
- ORThey served a minimum of six years in the National Guard or Reserves
- ORThey are the spouse of a service member who either died in the line of duty or later on as a direct result of an injury incurred during their service
Getting the Certificate of Eligibility
Understanding VA Loan Income Requirements
Other Eligibility Criteria
What to Expect When Applying for a VA Loan
The Advantages of VA Loans
The VA loan program is one of the easiest ways for current and former service members to make home ownership a reality. The loans have flexible terms and are backed by the government. They also offer significant benefits that can make these loans work in situations where others simply aren’t feasible. So, what are these benefits?
No Down Payment
Service members tend to move around a lot as part of the nature of the job, and this can make saving up money difficult. VA loans are designed to address this common hurdle by eliminating the need for a down payment. When combined with VA loan interest rates, this ensures that current and former service members can afford to buy a home and pay it off within a reasonable timeframe.
No Private Mortgage Insurance
When borrowing from a conventional lender, homeowners have to put down at least 20 percent of the home’s value as the down payment or spend a significant amount each month on private mortgage insurance. VA loans have no private mortgage insurance requirement because the government itself backs the loans. This allows the borrower to keep more of their money and makes it easier to build equity.
Better-Than-Average Interest Rates
Interest rates are not just a way for lenders to make money; they are also there to protect them against the risk they take on when they issue the loan. But with VA loans, the government backs them with a guaranty. This means lenders take on less risk, and they can pass that on in the form of interest rates that are as much as a full percent lower than the industry standard.
Flexible Income Definitions
With traditional loans, things like housing allowance are not allowed to be considered as part of the borrower’s income. However, with a VA loan, the Basic Allowance for Housing (BAH) is counted as income and can be used to both document financial stability and to pay on the loan.
No Prepayment Penalty
With conventional loans, it is common for lenders to penalize borrowers who pay off their loans early. But this is not the case with VA loans. With these loans, borrowers can pay them off in full at any point without needing to pay a penalty.
If these VA loan advantages sound good to you, it is time to learn more. Contact one of our loan specialists to find out if you are eligible.
Refinancing With a VA Loan
The Department of Veterans Affairs offers numerous ways to make homeownership more accessible for those who have served in the United States Military. One way that they do this is giving current and former service members the option to refinance with a VA loan. Borrowers can take advantage of lower interest rates to bring down their mortgage payments and even get cash back to use on paying down debt, home renovation, and other items.
Types of VA Loan Refinancing Available
There are two programs offered to VA borrowers to let them refinance and take advantage of a lower interest rate. They are the VA Streamline Refinance—sometimes called the Interest Rate Reduction Refinance Loan—and the VA Cash-Out Refinance.
The VA Streamline Refinance is ideal for those who already have VA loans and want to take advantage of dropping interest rates and lower their monthly payments. This type of refinancing requires minimal paperwork and the borrower can add the closing costs to their overall loan amount, allowing them to avoid out-of-pocket costs. In some cases, an appraisal will be required, but not always.
VA Cash-Out Refinance can be used by someone with an existing VA loan or a conventional loan from another lender. It is best for those who have a solid reason for needing access to cash. The borrowers take out a loan against the equity in their home, getting the value in cash. Due to the currently low interest rates, this can be an ideal way for a veteran or active service member to repair their home, take care of an emergency, or handle other financial concerns.
Eligibility for VA Loan Refinance
Overall, if someone is eligible for a VA loan, they are also eligible for refinancing with a VA loan. Applicants must meet at least one of the following criteria:
They served a minimum of 90 consecutive days in active service at a time of war
They served a minimum of 181 days of active service during a time of peace
They served a minimum of six years in the National Guard or Reserves
They are the spouse of a service member who either died in the line of duty or later on as a direct result of an injury incurred during their service
Of course, determining eligibility is only the start. To learn more about the process of refinancing with a VA loan or get professional guidance in your journey, speak with one of our loan professionals.