Applying for a home loan can be frustrating and confusing for anyone, especially first-time buyers. First-time buyers, according to the 2016 National Association of Realtors Profile of Home Buyers and Sellers, account for 35% of home purchases. Veterans who are buying a new home have the ability to apply for a specific type of loan even if they’re first-time buyers. Since there are so many little things needed to know about applying for home loans, things can get jumbled and what is supposed to be an exciting process of finding your new home becomes a painstaking ordeal. So here are some things about a VA home loan that you may find useful if you’re in the market:
How to Qualify for a VA Loan
If you’ve served in the military you could potentially qualify for a VA loan. These loans are tailored specifically towards veterans and are offered through lenders. The Department of Veteran Affairs sets a list of requirements needed to be met in order to qualify for a VA loan. These are the general requirements:
- Must be an eligible Veteran with available entitlement
- The loan must be for a verified and acceptable purpose
- The home will need to be occupied shortly after closing
- Credit must be at a certain minimum
- Source of income from the Veteran and spouse (if any) must be sufficient enough to cover housing expenses i.e. mortgage payments, repairs, family costs, etc.
Benefits of a VA Loan
- In most cases, there is no down payment required.
- No monthly mortgage insurance premium
- Sellers can potentially pay for all of the buyer’s closing costs associated with the loan and up to 4% in concessions.
- A VA loan has the lowest average interest rates than all other types of loans
- Buyers can pay off their loan early with no fees or penalties
- Mortgage payments can be assumed by another party if necessary
- Foreclosure specialists who help find alternatives if it gets to that point.
As with every home purchase, you will need to find a qualified lender, one who can provide the VA loan — the Department of Veteran Affairs is not a lender. If you are seeking to use the VA loan and are beginning or in the process of finding a new home it would be beneficial to find a realtor that is familiar with the loan process and working with Veterans. They may be able to explain things that an average realtor could not and give you the maximum amount of benefits possible.