This Sunday, November 11 is Veterans Day. It is a time to remember and thank those who have served our country. One way that a grateful nation recognizes the service and sacrifice of veterans, active duty military, and their families is through the VA Home Loan Program. We think it’s important for everyone to know the advantages of a VA Loan.
What is a VA Loan? The program is a loan guaranty benefit provided by the U.S. Department of Veterans Affairs. The VA makes it possible for lenders to provide loans to eligible Service members by guaranteeing a portion of the loan. It was created as part of the Servicemen’s Readjustment Act of 1944, known as the GI Bill, to help soldiers returning from World War II re-enter civilian life. Other benefits included 52 weeks of unemployment compensation, payment for education and training, and loan guaranty programs for businesses and farms. The educational benefits and the Veterans Administration (VA) Home Loan Guaranty Program continue to this day.
No Down Payment. One of the greatest advantages of a VA loan is the ability to obtain 100% financing of the home purchase. As long as the purchase price doesn’t exceed the appraised value, 100% financing is typically available, subject to qualification and VA loan limits, which mirror Federal Housing Finance Agency conforming loan limits.
No Mortgage Insurance. Because the VA guarantees these loans, there is no monthly mortgage insurance required., however, there is a VA Funding Fee, which can be financed into the loan amount. The VA Funding Fee is waived for qualifying veterans with service-related disabilities.
Competitive Rates. The VA loan guaranty also means that rates can be very competitive with comparable loans. Talk to your mortgage loan originator about your loan options.
Lifetime Benefit. There’s a common misconception that the VA Loan benefit is for one-time use only. Not true. There are strict guidelines governing eligibility but generally speaking, as long as the property purchased with the previous VA loan has been sold and the loan paid in full, eligibility will be restored. There are exceptions that may provide greater flexibility, so it’s important to work with a mortgage loan originator who understands the program.
Closing Costs Limited. The VA sets limits on the closing costs for the loan, and the seller can pay some closing costs. The seller pays for the required termite inspection.
First Choice Loan Services Inc. honors our veterans every day by offering VA Home Loans. There are specific requirements and guidelines, so it’s important to work with a lender who has thorough knowledge of the program. One important point: Although commonly referred to as VA Loans, eligibility extends to active duty military, surviving spouses and reservists.
Veterans Day is November 11, a Sunday this year. Check locally to find out when celebrations will take place. (They may happen on other days near the 11th.) Remember, you don’t have to wait for Veterans Day to thank veterans for their service. You can donate your time or money to an organization that supports veterans, visit a VA Hospital and see what help they need, or simply attend a parade. Today, and every day, thank a veteran.