What is a VA Loan?

A VA home loan, offered by the Department of Veterans Affairs, is a powerful benefit available to eligible service members, veterans, and certain military spouses. With benefits like $0 down, competitive interest rates, and no private mortgage insurance (PMI), a VA loan can make homeownership more affordable. Unlike traditional mortgages, VA loans do not require borrowers to pay PMI, which typically protects lenders until the borrower reaches 20% equity in the home.

For most eligible veterans and service members, a VA loan is a highly valuable option, providing significant advantages over conventional loans. Below, we’ll explore the VA loan process and guide you through how to apply.

VA Home Loan Overview

VA loans are issued by private lenders but backed by the U.S. Department of Veterans Affairs, allowing for benefits like little or no down payment and no PMI. Since its inception in 1944, the VA loan program has helped over 25 million veterans and service members purchase homes.

VA Loan Eligibility

You may be eligible for a VA loan if you meet one of the following service criteria:

• Completed at least 90 days of active duty during wartime.
• Served at least 181 days of active service during peacetime.
• Accumulated 6 years of service in the Reserves or National Guard.
• Served at least 90 days under Title 10 or Title 32, with at least 30 consecutive days for Title 32.
• You’re the spouse of a service member who died in the line of duty or due to a service-related disability.

To start the VA loan process, you’ll need to talk to your

Mortgage Advisor, Dustin Dumestre (Brokered Loan Officer)

who will help you find a lender who offers VA loans and request a rate quote. From there,

Dustin

will guide you through the approval process, helping you work through the steps to secure your loan and close on your home.

VA Loan vs. Conventional Loans

One of the standout benefits of VA loans is that they require no down payment, unlike conventional loans, which may require up to 20%. This can make it easier to afford a home. Additionally, since VA loans don’t require PMI, you can save hundreds of dollars each month. The government backing of VA loans often results in more favorable interest rates compared to conventional loans, which can significantly reduce costs over the life of the loan. Lastly, VA loans have more flexible qualifying criteria, making them an option even if you don’t meet the standards for traditional mortgages.

Types of VA Loans

The VA offers a range of loan options to suit different needs, including:

• VA Purchase Loan:

  Buy a home with no down payment.

• VA Interest Rate Reduction Refinance Loan (IRRRL):

  Lower your interest rate or switch from an adjustable to a fixed rate.

• VA Cash-Out Refinance

  : Convert home equity to cash or refinance a VA or conventional mortgage.

• VA Energy Efficient Mortgage:

  Finance energy-efficient home improvements.

• VA Rehab and Renovation Loan:

  Cover the cost of home improvements.

Most VA loans include a funding fee, which goes to the Department of Veterans Affairs to support future VA loans. First-time borrowers typically pay around 2%, while repeat borrowers pay about 3.3%. Some borrowers, like those with service-related disabilities, may be exempt from the fee. The good news is that this fee can be rolled into your loan amount. Additionally, VA loan closing costs are often lower, and sellers may be able to cover these costs.

VA Loan Limits

Since 2020, there are no longer mandated loan limits for VA loans, meaning you can borrow as much as your lender approves based on your financial qualifications.

How Much Can You Qualify For?

The amount you qualify for on a VA loan depends on several factors, with your debt-to-income ratio being one of the most important. This ratio measures your monthly debt payments against your gross monthly income, helping to determine how much you can comfortably afford in monthly mortgage payments.

VA loans offer a unique opportunity for those who have served to secure affordable home financing, often with terms and benefits that far exceed those of traditional loans. To see if you’re eligible, reach out to your

Mortgage Advisor, Dustin Dumestre (Brokered Loan Officer),

a VA loan is definitely worth considering.