If you are active duty military or have been honorably discharged, you may qualify for a VA home mortgage. The VA does not issue loans, but insures them so that a VA approved lender can loan veterans money without the full risk of issuing the loan. This enables veterans to obtain home loans with less money down, lower credit scores, and less credit history. The VA makes it possible for millions of veterans and their families to purchase a home or to refinance. As a veteran, there are many benefits to obtaining a VA mortgage over a traditional mortgage.
What You Should Know About VA Home Mortgages
• No Down Payment – The VA offers a zero down payment mortgage loan for people buying a home.
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• Disability Waiver – If you are a disabled veteran the VA will waive their funding fee.
• Service Member Civil Relief Act – Members of the military that are active duty qualify for the Service Member Civil Relief Act which prevents lenders from charging too much interest and can even postpone mortgage payments or foreclosure proceedings. This Act is meant to protect members of the military from economic hardship during their time of active service.
• Streamline Refinance – Once you have obtained a VA home loan you may qualify for their streamline refinance program, the Interest Rate Reduction Refinance Loan. This is a fast and easy way to lower your interest rate, without a lot of paperwork.
• Native American Direct Loan – Native American veterans, or veterans married to a Native American, may qualify for this program. It allows the borrower to purchase and rehabilitate a home on tribal land or to refinance to a lower interest rate. The interest rate is also lower than the standard VA mortgage loan rate.
• Adapted Housing Grants – The VA offers funding to disabled veterans to improve their home. Those that are considered fully or partially service disabled may qualify. Eligible improvements include bathrooms, kitchens, bedrooms, security features, hand rails, doors, windows, flooring material and more. Veterans can complete their application directly with the VA and the grant can even be used to build a home.
• Cash Out Refinances – After the housing bubble burst, many lenders stopped issuing cash out refinance loans. The VA offers them and the cash out is a way to use the equity in your home to pay off debts, student loans, and making home improvements. All of this can be done at an interest rate that is much lower than credit cards or personal loans.
If you are a veteran, or a current service member, start by speaking with a VA approved lender. They can guide you through the process of obtaining your Certificate of Eligibility. Once obtained you can apply for a VA purchase or refinance loan by filling out a full loan application. The mortgage lender will request your income documentation and run a credit report to determine how much you qualify for. Interest rates are low, and home values are rising so now is an excellent time to use a VA home mortgage to purchase or refinance your home.
