Half the home loan mortgage battle is won if you know how VA home loans are processed. For a majority of veterans, it is the only step towards getting the home of their dreams. But staying factually aware of the procedures involved is especially crucial for getting your VA home loans processed.
According to a recent survey organized by the US Department of Veterans Affairs (VA), an astounding thirty-three per cent of veterans are not aware of the benefits of VA home loans. Although the onset of social media trends and a crashing housing market has assisted many active military personnel and war veterans with their home loan mortgage issues, there is still much more left to do.
In the last five years, only a meagre six per cent out of more than twenty million veterans all over the USA have used the VA home loans to become homeowners. But what about the rest? Well, even eligible veterans most often neglect the VA home loans scheme as an affordably viable home loan mortgage option.
Some veterans may not have all the information, while others may believe that taking out VA home loans in Parker is complicated and should be avoided. Some government-authorized lenders do not put in enough time and effort to properly inform veterans about their home loan mortgage options. The VA home loan benefits are the stuff of dreams for civilian homebuyers.
It may not always be the best housing option for veterans, but whether you are purchasing or refinancing, taking out VA home loans in Greenwood is truly worth exploring. When I dug a little deeper, I discovered a long list of interesting facts about VA home loans and how they can benefit veterans in dire need.
My only advice for veterans thinking of becoming homebuyers is this; take a few deep breaths and go through these surprising facts about VA home loans for added clarity.
1. You Can Only Purchase Primary Residences With VA Home Loans
VA home loans can be used to purchase various living options, including single-family homes, homes of up to four units, condos, and even manufactured housing units. Such ideal starter homes can offer a sense of belonging for freshly returned veterans.
On a veteran’s stipend, there aren’t many affordable living options available in most places.
Still, the VA home loans can’t be used to purchase holiday homes or grow your equity. Mainly because strictly enforced residency requirements set forth by the US Department of Veteran Affairs render most such real estate ineligible for home loan mortgage.
For the ease of veterans, the VA generally compiles a list of approved housing localities and condo units. I should warn you, that the list is not short, by any means.
Veterans can search for preferred home choices filtered by names, locations, features, etc., on the VA’s website. As a veteran, you should consider a wide variety of housing options when taking out VA home loans in Denver.
2. You Can Purchase, Refinance, or Cash Out Home Equity
Most military and non-military people believe that VA home loans can be taken out just for purchasing homes. Let me put your mind at ease; it is not true at all.
Of course, VA home loans can provide unparalleled homeowning help, but they can also be used for refinancing your existing home loan mortgage, no matter if it is VA-approved or not.
i). Interest Rate Reduction Refinance Loan (IRRRL)
The IRRRL can be used to quickly drop the interest rates and monthly payments of homeowners with a pre-existing VA-backed loan. These VA home loans do not even require appraisals, pay stubs, W2s, or bank records for processing.
The VA’s streamlined refinance also provides VA-backed loan holders quicker, more economical switching methods to lower interest rates when the market declines.
ii). Cash-Out Refinance Loan
The VA cash-out refinance loan can be availed by any eligible veterans who do not have an existing VA-backed home loan mortgage currently. Precisely as the name suggests, veterans can use the VA cash-out refinance loan to encash their home’s market value.
All you need to do involves taking out an even bigger VA-backed loan than your current VA home loan’s value. At the end of the pleasant transaction, the difference amount is usually deposited into your bank account.
I have personally seen the VA cash-out loan amount going up to one hundred per cent of the home equity in many cases. How you use the newfound capital is for you to decide.
You can pay off your debts, invest in household improvements, collect for college tuition, or even purchase a brand new car. If you want my advice, you can kill two birds with one stone by simultaneously dropping your interest rates and taking extra cash out with the VA cash-out refinance loan.
3. You Can Avail VA Home Loans With No Down Payment
One of the most significant advantages of taking out VA home loans is that you don’t need to make any down payments to become a homeowner.
I checked many other conventional home loan mortgage schemes like the FHA and found out that almost all of them required at least three and a half to five per cent down payments. A $250,000 conventional home loan should cost you anywhere around $12,500 in down payments to give you a better idea.
So veterans can take out VA home loans in Parker to instantly buy a home rather than wait years saving up for enough funds to make a down payment.
4. You Don’t Have To Spend On Private Mortgage Insurance.
Veterans taking out VA home loans can also avoid the Private Mortgage Insurance (PMI) associated with other conventional home loans. If you ask the PMI providers at MGIC, the monthly PMI fees at a steep five per cent can cost you up to $150 per month for a $250,000 home loan mortgage from other lenders.
A veteran who qualifies for VA home loans can afford to own a home with $30,000 worth of added value at the same monthly payments because they do not have to make monthly PMI payments. Hence the VA home loans are designed to save veterans money upfront while tremendously increasing their home buying power.
5. You Receive Funding Fee Waivers And Property Tax Exemptions
Typically, even the VA charges a nominal funding fee to meet the capital needs of the VA home loans program and maintain the sustainability of VA-backed home loan mortgages for future Veterans. Depending on the service history of veterans and the type of loan they need, the funding fee can be anywhere between 0.5 per cent and 3.3 per cent of the total loan value.
But wait, not every veteran has to pay the VA funding fee. Most disabled war veterans on service-connected disability compensations or others who are eligible but receive retirement benefits or active duty pay instead can get their VA funding fee waived off. Veterans may also qualify for property tax exemptions in their respective states, depending on the statewide guidelines.
6. You Have To Pay Comparatively Lower Loan Interest Rates
According to my loan market research, VA home loans are given out at enticing interest rates, usually about 0.25 per cent lower than the conventional home loan mortgage standards. Since the VA guarantees these home loans for veterans, local lenders consider them a substantially lower risk and help pass on the benefits to veterans in need.
Another interesting fact I discovered during my research was that VA-approved home loans have the lowest foreclosure rates compared to other available loans in the market. Such positive factors add up to provide lower interest rates and affordable payment options for veterans taking out VA home loans in Greenwood.
7. You Qualify Even After Bad Credit, Bankruptcy, or Foreclosure
We are all aware that any conventional loan scheme checks for lower credit scores, instances of bankruptcy, or foreclosures in our bank records to ascertain the risk factor.
Thankfully, a bad financial history does not disqualify veterans from getting VA home loans in Denver. VA-approved lenders allow leniency in giving out loans to veterans with bad credit histories because the guidelines set forth by the VA do not state a minimum credit score for eligibility.
Many veterans have to go through foreclosures or declare bankruptcy all over the USA due to sudden loss of income, medical emergencies, or other unforeseen situations.
But a veteran’s credit is considered re-established by the VA after maintaining clean credit for two years since their last foreclosure or bankruptcy. Hence, such financial setbacks, although common among veterans, do not disqualify them from becoming homeowners shortly.
8. You Can Enjoy The Benefits Of VA Home Loans For Life
Frankly, one of the best things about VA home loans is their lifetime benefits for veterans. If you think taking out a VA home loan is a one-and-done deal, prepare to be corrected.
Veterans can effectively use the benefits as many times as they need throughout life. The only catch, there can only be one VA-backed home loan mortgage per veteran at any given time.
Let’s go through some of how veterans with existing loans can reuse their VA home loan benefits. When a veteran pays off their existing VA-backed loan in full, their entitlement is completely restored, and they can reuse their lifetime benefits to purchase, refinance or cash out.
Another way to reuse the benefits is the one-time home restoration top-up that qualified veterans can use when they fully pay off their old VA loans. This scheme is only applicable to veterans who purchased a home years ago and have since paid off the mortgage in full or ones who refinanced the VA-backed home loan mortgage using a non-VA loan.
Veterans eligible for VA home loans don’t lose their benefits as long as they are alive. Even veterans who served more than 50 years ago and never used their VA home loan benefits can qualify for new VA-backed loans. Also, the eligibility is dependent on the duration and the period during which you served in the armed forces.
9. Your VA Home Loan Benefits Are Available For The Surviving Spouses
I don’t think any compensation is good enough for the surviving spouses of our fallen war heroes. Still, the VA-backed benefit schemes can surely assist them in moving on from their unimaginable loss.
Thousands of surviving spouses in the USA use their fallen partner’s VA home loan benefits to purchase homes for their families every year. Even the partners who never remarried after their veteran spouses were killed in action are eligible for taking out VA home loans in Parker at zero down payment, no private mortgage insurance, and waived funding fees.
10. Your Local Lenders Have To Provide VA-Approved Home Loans
Unlike other VA-backed benefits, VA home loans can be availed from VA-approved private lenders and not directly from the federal government. The Department of Veterans Affairs cannot accept or approve loan applications and does not issue any capital funds. Only VA-approved private lenders, credit unions, and home loan mortgage companies can process VA home loans.
The official VA guarantee offers assurance to private banking institutions for full repayment in case veterans cannot make payments on their VA home loans. In return, these local VA-approved lenders give out VA-backed home loans at much better market terms than other conventional loans.
The VA home loans in Greenwood are responsible for making the brave veterans or their surviving spouses a part of the proud home-owning community in the USA. Its mission is to assist veterans with purchasing, constructing, restoring, maintaining, or modifying their homes to create suitable living conditions.
10 Amazing VA Home Loan Mortgage Facts and Statistics
Here are some amazing VA home loan mortgage facts and statistics for veterans:
- You can only purchase primary residences with VA home loans.
- You can purchase, refinance, or cash out home equity.
- You can avail of VA home loans with no down payment.
- You don’t have to spend on private mortgage insurance.
- You receive funding fee waivers and property tax exemptions.
- You have to pay comparatively lower loan interest rates.
- You qualify even after bad credit, bankruptcy, or foreclosure.
- You can enjoy the benefits of VA home loans for life.
- Your VA home loan benefits are available for the surviving spouses.
- Your local lenders have to provide VA-approved home loans
I hope you found the facts mentioned above about VA-backed home loan mortgages interesting, informative, and surprisingly helpful. You can learn more about eligibility and benefits on VA’s official website.
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Eric Kulbe, the founder of Synergy One Lending, Inc. has been a leading name in the mortgage lending business for decades. As one of the most respected figures in the real estate market, he loves helping his clients and partners achieve their goals with his vast industry experience, personal and professional connections, and ever-increasing mortgage trade awareness.