What is a VA Loan?
VA home loans are provided by private lenders, such as banks and mortgage companies, instead. With VA loans, veterans, service members, and families of service members can purchase homes with little to no down payment, no private mortgage insurance (PMI), and generally get a competitive rate (investopedia.com)
How do VA Loans work?
VA loans work a bit differently than conventional mortgages.
The Department of Veterans Affairs (VA) does not make or originate loans but backs a portion of each loan against default.
This backing, or guarantee, is what gives private lenders the confidence to extend $0 down financing and advantageous rates and terms.
VA Interest Rate Reduction Refinance Loan (IRRRL) is one of the VA loan program’s two refinance options and the one most Veteran homeowner choose.
These are also known as VA Streamlines, and that’s because they’re simple, low-cost refinance loans that in some cases might not require credit underwriting, income verification, or an appraisal.
The VA IRRRL is only for Veterans who currently have a VA loan, require your new rate is smaller than your old rate, and have a limit on the time it takes to recoup the costs and fees. All of which help ensure Veterans realize the full financial benefit. (veteransunited.com)
VA Cash-Out Refinance
VA Cash-Out refinance allows qualified homeowners to refinance their mortgage and take out cash from their home’s equity. These loans are open to Veterans with and without current VA loans. Qualified homeowners can typically refinance up to 90 percent of their home’s value.
What is the VA funding fee?
The VA funding fee is a one-time payment that the Veteran, service member, or survivor pays on a VA-backed or VA direct home loan. This fee helps to lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly mortgage insurance. (va.gov)
How will I pay this fee?
You can include the funding fee in your loan and pay it off over time (called financing) or pay the full fee all at once at closing. (va.gov)
VA Loan Eligibility Requirements
In general, you would qualify for a VA home loan if you served in the Army, Navy, Air Force, Marine Corps, or Coast Guard after Sept. 15, 1940.
You must have served for at least 181 continuous days during peacetime or at least 90 days, any part of which occurred during wartime.
If you were dishonorably discharged or did not serve long enough, you may not be able to get a VA loan.
National Guard members and reservists qualify if they are mobilized for active duty for at least 90 days or discharged because of a service-connected disability. They also qualify after six years of honorable service.
You’ll need a certificate of eligibility to participate in the VA loan program. You can apply for your COE online or by mail, or your VA lender can get it for you.
Surviving spouses also can sometimes get VA loans if their husband or wife passed away while serving or due to a service-related disability, became a prisoner of war, or went missing in action.
In addition to meeting military service requirements, you’ll also have to meet financial requirements. You will need to demonstrate that you’ll be able to pay your mortgage, but a bankruptcy that was discharged two or more years ago will not disqualify you. (forbes.com)
Utilize your local friendly Broker.
Finally, it’s important to get a personalized quote.
What better way to shop around than to allow your local broker to do ALL the shopping for you.
Your local broker can provide you with WHOLESALE pricing vs RETAIL pricing.
Utilizing your local broker will help you with better offers on your mortgage as they work with a Variety of Lenders who specialize in VA Loans.