The United States is one of the most patriotic nations. In the spirit of patriotism, the US government honors it’s military by guaranteeing low cost home loans vis-à-vis the VA home loan program. If you or your spouse has served in the military (regardless of combat experience), you may be entitled to a VA loan.
VA loans are special in that they provide a no money down and a no buyer paid closing costs option. This can add up to thousands of dollars in savings when compared to a conventional purchase loans.
In order to qualify for a VA loan, a person must have served active duty for at least 181 days. Thanks to an expansion of benefits in 1992, it is now possible for reservists to qualify for the program, provided they have served at least six years of their commitment or if they have been deployed for 181 days. Civilians may also get a VA loan but only a VA Vendee loan.
If the applicant is older, which is to say old enough to have served before 1975, then it depends on whether he or she was active during certain periods. Some veterans were not, and therefore may not be eligible for the VA loan benefit.
The widows of many qualifying veterans may receive VA benefits as well. A veteran is not eligible if they received a dishonorable discharge.
The United States Department of Veterans Affairs does not offer funding for VA loans, except to qualifying individuals living in more remote areas, or in areas where they may not otherwise find one. The VA basically offers insurance on the mortgage. Whenever a person applies for a loan with a downpayment of less than 20%, that institution typically requires the lender to obtain private mortgage insurance (PMI) as a security. If the borrower falls on financial hard times, then they may use this insurance to help pay what liquidation of the property cannot pay. The VA loan guarantee eliminates the need for PMI as it serves the same purpose. The veteran is thus free from having to pay this insurance, or is otherwise guaranteed a direct loan if private borrowing is not possible. Either way, this means being able to borrow a larger sum of money with greater security than what may be possible according to their salary.
The VA loan benefit may be used to pay for a foreclosure, short sale, REO, condo, house, townhouse, or multi family (1-4 unit income property). The rule is that the property must pass VA appraisal and inspection. These measures will protect the borrower from overpaying for the home and giving the borrower the knowledge that the home is in safe and habitable condition.
The VA program may be used more than once. A down payment may be required for the second loan.
Under normal circumstances, it is necessary to wait at least 24 months after a short sell before you can submit a new VA Loan Application. This gives the government and the investor a chance to see your developing financial circumstances before taking on the risk of guaranteeing or funding a loan. If you have not been able to make your debt payments on time for at least twelve months, then it is too risky to lend or otherwise insure the money.
The government standards to borrow money on a VA loan are less strict than a private company because it is a government program primarily for veterans.
To see if you qualify for a VA loan or to have VA Home Loan Centers find you the lowest rate possible, call 888-573-4496 and ask to speak with a loan counselor.
