Being a veteran comes with many benefits. One of those benefits is the availability of Veterans Administration-backed home loans, often simply referred to as VA home loans. Here's an overview of VA home loans, who provides them, and what the requirements are to get one. As a veteran, you should take advantage of this benefit and purchase a home with a VA loan.
What Are VA Home Loans?
VA home loans are loans that are guaranteed by the Department of Veterans Affairs (VA). This does not mean that the VA lends money directly to you for a mortgage, but rather they 'guarantee' the loan by telling the bank that they will cover any losses should you default on the loan.
VA home loans are available to active-duty service members, veterans, reservists, and eligible surviving spouses in all military branches, including the Coast Guard. VA home loans can be used to purchase a primary residence and refinance an existing home loan. The biggest benefit of a VA home loan is that there is no down payment required.
Who Provides VA Home Loans?
In most cases, banks, credit unions, and mortgage companies provide VA home loans to eligible borrowers. The VA then guarantees a portion of the loan, which gives lenders the confidence to write you a loan with favorable terms, including:
- No down payment
- No monthly mortgage insurance premium
- Low-interest rate loan
Many times the VA's guarantee helps you get a home loan, even if you would not otherwise qualify for a conventional loan. In some extreme cases with extenuating circumstances, the Veterans Administration will provide direct financing for veterans who wish to purchase homes with VA loans. In these cases, interested veterans should contact their local VA office.
What Are The Requirements For A VA Home Loan?
The first step in getting a VA home loan is to obtain your Certificate of Eligibility (COE) from the VA. To do this, you'll need to fill out and submit the Veterans Administration's Request for a Certificate of Eligibility form along with evidence of your military service. Once you have your certificate, you can then shop around for a lender who offers VA home loans. Be sure to compare interest rates and fees between different lenders before choosing one.
It is important to note that anyone who was dishonorably discharged from any branch of military service has forfeited their right to VA benefits, including VA home loans.
If you're a veteran or an eligible surviving spouse, take advantage of the benefit of VA home loans by using one to purchase a home and achieve your dream of home ownership.
Contact a provider to learn more about VA home loans.