Most people dream of buying a house, but few get the opportunity to do so, given the extensive and complicated process it involves. Now, it may be daunting, but you should grab the opportunity to purchase a house you can call home.
Today, we’ll discuss a type of home loan that you and other US veterans can use to assist in the journey of becoming a homeowner.
What Is a VA Loan?
The VA loan or Veterans’ Home Loan Program is a financial program available to veterans, service members, and their surviving spouses. It enables eligible military personnel to purchase homes with little or no down payment.
The United States Department of Veterans Affairs (VA) guarantees the loan. It means banks and other mortgage lenders can loan you the money with the confidence that the government will pay a portion of the mortgage even if you fail to make payments.
How to Qualify for a VA Loan
Veterans must fulfill several criteria to qualify for a VA loan. See below:
- You must meet the minimum active-duty service requirement.
- You must have been dishonorably discharged or released from service.
- You must have a clean record with the general court-martial.
- You cannot be a delinquent on any federal debt payments.
- You must have a good credit history.
Spouses of service members who passed away in the line of duty can also qualify for VA loans.
VA Loans vs. Conventional Loans
Conventional home loan limits vary according to the borrower’s location, credit history, and income, but VA loan limits do not depend on any of these factors. In addition, VA loans are more advantageous to veterans, given that you do not need to make a down payment, provided that the selling price isn’t higher than the appraised value.
Other benefits to VA loans include the following:
- You don’t have to pay private mortgage insurance (PMI).
- You can finance 100 percent of the home’s value.
- Properties in designated high-cost areas can waive the VA funding fee.
- There is no maximum number of homes you can finance with VA loans.
- The VA funding fee is usually lower than the conventional loan.
How to Apply for a VA Loan
The first step is to find a lender that offers VA loans. The VA maintains a list of the lenders, so check if your lender is on it. If you are a first-time homebuyer, they may require you to complete a certification process.
You will also need to fill out a VA Form 26-1880, “Application for Guaranteed Home Loan.” The form is available at the VA website, or you may call your lender to get a copy.
Other documents you’ll need for the process include Certificate of Eligibility, DD-214, Certificate of Release or Discharge from Active Duty, and bank statements.
Is the VA Loan the Home Loan for You?
To recap, veterans can get a VA loan to purchase a home, provided they meet the loan requirements.
Depending on your unique situation and personal preferences, the VA loan is a viable home loan option. The process may be complicated and lengthy, but you’ll find that the advantages are well worth it once you acquire your dream home.
If you’re looking for a mortgage lender in Sacramento to assist you with your loan application, we will gladly help you with the process. The Hawkins Home Loans team strives to provide our clients with a stress-free home purchasing process with our quality services and low rates. Schedule an appointment with us today to get started on your homeowner journey!