One of the best benefits provided by the VA is the VA home loan. This loan is available to different people, such as veterans, spouses of military members who died in service, and long-standing military members. The VA home loan program can help you with VA mortgages that don’t require a money-down option.
How Do VA Home Loan Options Work?
The first step is to get your VA Certificate of Eligibility. This certificate is obtained at the Department of Veteran Affairs, and you can get help acquiring it from your lender. After getting your certificate, you should start talking to your lender about terms, interest rates, and other aspects of your loan. As we mentioned earlier, you must have spent enough time in the military to qualify for a VA home loan. The military expects at least 90 days of active service before you can be considered for this loan. These 90 days can’t include any basic or advanced training.
Please note that being qualified to apply for a loan doesn’t mean you’ll get it. Your lender and the VA will consider other things before they grant you a loan. Most importantly, you will need to credit-qualify for the VA loan.
VA loans usually have a zero-down option. It’s possible, however, to opt for a down payment as it will bring down the VA loan funding fee. Your loan will have no limit if you have 100% of your entitlement. Alternatively, you will be subject to a limit if you don’t have 100% VA loan entitlement.
The goal of a VA loan is to help military members and veterans obtain homes. Occupancy is essential for your loan to get approved. You can’t use a VA loan to invest in a property that will be used as a business, such as a hotel or bed-and-breakfast. You can buy homes with up to four living units, but you have to be an owner-occupier.
The interest rates on VA loans are negotiated between the borrower and the lender. The VA doesn’t have set loan interest rates. The only requirement set by the VA is that the interest rates are similar to those in the marketplace. Remember that your credit history will have a role in deciding the interest rates imposed.
Those interested in borrowing with other non-military members should know that the VA will only guarantee the military member’s portion of the mortgage. The only exception is if a married couple is applying and only one is a member of the military.
The aforementioned rules and guidelines should help you get started on your VA home loan. It’s important to know that the property you purchase can’t be later transformed into a business such as a hotel, as this would be a major violation. For more information, you should talk to your lender about whether you qualify for a VA home loan and your next steps.