American Veterans Affairs loans are designed to offer a long-term financing option to qualified American veterans and in some cases, their surviving spouses. The objective of the VA direct home loan program is to ensure that eligible veterans have financing to purchase their own home, particularly for veterans who might not qualify for traditional financing, as well as those who live in rural and/or remote areas.
Veterans who qualify for Veteran’s Affairs loans can purchase properties without offering a down payment.
Veterans, National Guard members, reservists, and active duty service members must meet a basic set of requirements in order to qualify for a VA Loan. In addition, the spouses of members of the military who died while on duty or as a result of a service-related injury or disability may also be eligible. The Department of Veterans Affairs determines eligibility for VA Loans. You might be eligible if you meet one or more of the following criteria:
- You’ve served for 90 days during wartime
- You’ve served for 181 days during peacetime
- You’ve given more than six years of service in the National Guard or the Reserves, or
- You are the spouse of a service member who died on duty or as the result of a service-related injury or disability
You might still be eligible, even if you don’t meet these criteria today. If you would like to find out whether you’re eligible, you should contact the Department of Veterans Affairs.
For veterans, service members, their families, there are a number of advantages to getting a loan through the VA loan program. Firstly, these flexible, government-supported loans can help veterans who would otherwise struggle to purchase their own homes to get financing. Some benefits include:
- No cash down. Eligible borrowers can finance 100 percent of their desired home’s value without having to offer a down payment.
- You don’t need private mortgage insurance. Most traditional lenders force borrowers to pay mortgage insurance—unless they’re able to put down 20 percent of the home’s value. But with a VA Loan, there is no private mortgage insurance. Loans are backed by the federal government.
- Competitive interest rates. Borrowers have access to rates that are actually lower than most major banks.
Since VA Loans are backed by the federal government, lenders can charge low interest rates. However, the lowest mortgage insurance rates are dependent on a good credit rating. The first step to securing a mortgage with VA is making sure you’re eligible. In addition, you will have to undergo the pre-qualification process, in which a financial officer will assess your household’s financial status to determine what kind of loan you qualify for.
The VA Home Loan program offers refinancing options for qualified homeowners. This program is a simple measure for veterans and their spouses to take advantage of reduced interest rates in order to decrease their monthly mortgage payment. In addition, military homeowners may qualify to receive cashback when they refinance—money which can be used to pay off debt or make home improvements. Military homeowners should first check to make sure they qualify for a VA Home Loan, or speak to a VA loan officer today to get a refinancing quote.