What are VA Loans?
The “VA” in VA Loans is an abbreviation for Veterans Affairs. That is the government office that set up the VA loan programs and provides the guidelines that identify who can qualify for the VA Loans.
The Office of Veterans Affairs doesn’t provide any lending services themselves but they are the government office that backs these loans. This program also extends coverage to the spouses of the military personnel, who with the support of their significant other could apply on their behalf – as long as they qualify according to the guidelines.
What are the benefits of applying for VA Loans?
If you meet the eligibility requirements of VA loans, you get the following benefits:
- VA Loans are backed by a government office
- The VA Office provides support to avoid loan defaults
- Mortgages of VA Loans have lower closing costs
- VA Loans come with 100% financing on the value of the property
- The sellers can cover the closing costs themselves
- There is no penalty for early repayment of the mortgage
- Private Mortgage Insurance (PMI) is not required since a government office backs the loan
- Down payment is not usually required
- If you already have a home in your name, you can still apply for a VA Loan
What is the eligibility required for VA Loans?
Since VA Loans are for military members and their spouses, you have to be an active member of the military. Additionally, you can be a war veteran, active duty member, Member of the National Guard, or their spouse.
Another major requirement for the process of VA Loans is to obtain the COE which is short for Certificate Of Eligibility. This is a certification that the applicant has to obtain from their respective administration or their online access portals. Once obtained, they have to submit it to the lender for verification. The COE is a confirmation from the military admins that the applicant is qualified to apply for the VA Loan.
Other requirements for the VA loan can be stricter. For example, the VA guidelines require the applicant to have residual income at the end of every month, this means that they should be saving some of their money on a monthly basis. The property being considered by the applicant should fit the requirements expressed by the VA guidelines and additionally, it should be purchased for personal use only. And even if you’re qualified for the VA loan, should still have a credit score that meets the requirements expressed by the lender.