Everything to Know About Getting a VA Home Loan

E ver wonder about VA home loans? These special loans are for our superheroes:  veterans and active-duty military members. These loans are like the secret weapon of the housing market, offering sweet perks like a low down payment and skipping the whole mortgage insurance deal. They make it easier for veterans and military personnel to purchase the home of their choice. If you’re a home buyer who qualifies for a VA loan, read on to see how it can help fulfill your ownership dreams.

For informational purposes only. Always consult with a licensed mortgage or home loan professional before proceeding with any real estate transaction.

Why Get a VA Loan?

Consider how conventional loan programs work. Even first-time home buyer options like FHA home loans require the buyer to put down at least 3.5%. The best rates more commonly require 20% or for the buyer to purchase private mortgage insurance (PMI).

These requirements are not always realistic for military personnel, so the VA loan is designed to make buying a home easier. Of the many VA home loan advantages, perhaps the biggest reason homebuyers seek these loans is they don’t require money down.

As a bonus, unlike other loans requiring little down payment, VA loans do not require the home buyer to pay mortgage insurance. Since the mortgage insurance premiums can cost as much as 0.5% to 1% of the entire loan on an annual basis, this is a significant savings for the buyer.

Closing costs add thousands to real estate transactions, but a VA home loan limits how much you’ll contribute to these.

Finally, VA loans typically have more attractive mortgage interest rates. To give you a basis for comparison, Bankrate reported average mortgage rates on November 15, 2023 as:

• 30-year fixed-rate mortgage: 7.76%
• 30-year fixed-rate FHA: 6.71%
• 30-year fixed-rate VA: 6.96%

Just remember VA home loan mortgage rates are always fluctuating with market conditions, so check with a trusted resource to get an update.

How Can You Find Out if You’re Eligible?

VA loans are available to military, veterans, and surviving military spouses. Typically, military personnel are eligible after serving either 90 or 181 days, depending on whether they’re serving in a time of war. VA home loans are only available to people trying to buy a primary home, not a second property. Other exclusions may also apply, so the best way for a service member, retired service member, or military spouse to find the current VA home loan requirements is to contact the local VA office.

This benefit is a lifetime benefit; you can use it each time you purchase your primary home.

Applying for a VA Home Loan

To obtain the loan, people who are eligible must still go through the pre-qualification and pre-approval process with a private mortgage lender. These include banks and mortgage companies. Like any loan process, the borrower must get a credit check and provide all the standard paperwork required to get a mortgage, like:

• Employment information
• Bank statements
• Tax documentation and other standard documentation.

This shows that the buyer has appropriate credit and credit history and can repay the loan.

The private lender will request your Certificate of Eligibility. This Department of Veterans Affairs document signifies you qualify for the VA home loan program. Which papers you’ll need to apply for the VA COE depends on your military status, so visit the VA website.

How to Find Out More Information About VA Loans

You may be eligible for a VA loan if you are an active duty military member or retired military personnel. Talk to a reputable lender if you’re hoping to get such a loan. A reputable lender can answer your questions about VA loans and help you determine your interest rate if you were to be approved for the loan.

Another way to learn more about buying a home with a VA loan is to contact a reputable real estate agent. Once you know how much money you qualify to borrow, your real estate professional can help you find homes that fit your budget. Working with the professionals will make your experience purchasing a home far better.

For informational purposes only. Always consult with a licensed mortgage or home loan professional before proceeding with any real estate transaction.

Updated November 2023