Veterans and active duty military personnel can choose to take advantage of VA home loans across the United States. These are specialized loans that are made through lenders that participate in the VA program.
The VA (Department of Veterans Affairs) doesn?t actually grant these loans, but they do partially guarantee the loan to the lender should the military member default on the loan. This creates a very low-risk lending scenario that offers several perks to the home buyer while also benefiting the lender.
No Down Payment Required
Most mortgages through conventional lenders or even through the FHA loan program require some type of down payment. For conventional loans, this is typically 5-20% depending on the loan and the lender. Even FHA requires 3.5% down.
With the VA home loans, there is no requirement for a down payment. Many people obtaining these loans may make a down payment, but the lender cannot require one for the applicant to be approved for the loan. Fees will be reduced on the one-time funding fee required based on the down payment, which can offer a substantial cost saving.
Veterans and active duty military, as well as reservists and National Guard members, can apply for a VA loan. Surviving spouses of military service men and women killed on active duty are also eligible to apply. This also is in effect in the military member has a disability due to a service injury.
There are some requirements for time to apply based on the type of service. The VA will provide eligibility requirements and will verify this with the lender.
As with fees and rates for VA home loans, individual lenders will also set the credit score requirements for the loan. Most will require a 620 score to be able to get the best interest rates, which is important to consider before applying for the loan.
Take the time to shop around with various lenders offering the VA loan program. This is time well-spent as it can save money and speed up the application and approval process.
Let our experts at Guaranteed Rate talk to you about your options in VA home loans. To find out more or to get in touch, see us online at www.guaranteedrate.com.