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How To Get A VA Loan

Updated on April 30, 2013
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Buying a home is one of the most important financial decisions anyone can make, especially a veteran. Most veterans travel a lot and home ownership can be a way for him or her to establish permanent roots in a community. The sense of pride and responsibility that home ownership affords can help veterans that have served overseas or in wars fit more comfortably into communities after their services.

Along with all the benefits of homeownership, there are also some pitfalls. It can be expensive. Most home buyers have to make a minimum investment to purchase a home. The deposits could range from 3 to 20% of the purchase price of a home. The down payment alone could sap financial resource and leave the unplanned and thoughtful buyer vulnerable in financial emergencies, but qualified veterans don’t have to worry about that.

Qualified veteran of the United States military may be able to purchase a home without a down payment through the Veterans Administration loan guaranty program. Veterans eligible for benefits under Chapter 7, Title 38, U.S.Code may qualify for up to an $360,000 entitlement benefit with the program. Most qualified veterans must have served more than 180 days of active duty and received an honorable discharge, but other conditions apply. Even veterans that were discharged due to service-incurred injuries may qualify.

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What is the loan guarantee program?

The loan program helps qualified veterans obtain loans to finance a home at competitive interest rates. The Veterans Administration (VA) guarantees the loans that are made by private lenders. All homes that the VA consider for the program must be appraised. The VA offers a guarantee of no more than 60 percent of the appraised value of the home up to the maximum guaranteed value.

What are some of the conditions of the VA mortgage loan guaranty?

• The amount of the loan must not exceed the VA's appraised value.

• The loan must have an interest rate which does not exceed current government standards.

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Can the loans be used to pay off debt?

There is a Cash Out Refi program that allows veterans to take cash out of their home equity. The cash can be used to pay off debt, make home improvements and even pay for college.

Can a veteran receive a guarantee more than once?

Yes, a qualified veteran may be eligible to receive a guarantee more than once. The veteran's previously guaranteed loan should be paid off. Ask the local or regional VA office for more information about this.

Who qualifies for the program?

The program is reserved for Active Duty Service members, eligible Veterans, the National Guard and Reserve members.

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How can a veteran find out if he or she qualifies for a VA mortgage loan guaranty?

Veterans must apply for a Certificate of Eligibility if he or she does not have one. It can be obtained from the VA benefits website. They may also request a Certificate of Eligibility for a VA Home Loan Benefits from their local or regional veteran’s office. They should include a copy of their DD214 Certificate of Release of Discharge when they submit their request for a Certificate of Eligibility.

Once the Certificate of Eligibility has been obtained the veteran can start the home buying process. The next step after a suitable house has been found is to sign a purchase agreement. Once a purchase agreement is signed the lender will order an appraisal from the VA. An approved VA lender can process the loan automatically. Unapproved lenders must snail-mail their application to the VA for approval.

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