Military borrowers have unique access to real estate financing through VA mortgage loans. According to the U.S. Department of Veterans Affairs (VA), the VA loan facility is designed to assist active service members, veterans, and their surviving spouses in owning a home. Understanding how VA loans work can help qualifying borrowers access mortgage services. Below are key facts about VA loans.
What Is a VA Mortgage Loan?
A VA mortgage loan is a $0-down financing option offered by private lenders with the Department of Veterans Affairs guarantee. The VA department guarantee allows lenders to offer up to 100% financing for a property. The mortgage can be used to buy, build, repair, or retain a house.
One can opt for the following types of VA loans:
Key Features of a VA Mortgage Loan
Firstly, the mortgage finances only residential houses. Besides, the loan facility is available for specific types of houses like single-family houses, condos, and multi-unit properties. Significantly, VA mortgage loans are reusable, meaning you can get another one provided you pay off the last one. Notably, there are no borrowing limits, no down payments, no-prepayment penalties, and no mortgage insurance. Thus, VA mortgage loans have very flexible terms.
The Procedure of Getting a VA Mortgage Loan
Get a Certificate Of Eligibility (COE): This certificate proves you are eligible based on your military service status. The proof submitted depends on whether you are a veteran, an active service member, or a spouse.
Get prequalified: Before shopping for a house, get preapproved. The lender will assess your payment capacity based on your income to know your credit ceiling. The approval helps to decide how much you can afford.
Select a house: Shopping for a house using a VA loan is similar to buying any other house. However, consider that VA loans only finance specific residential properties. The house must meet the VA's Minimum Property Requirements (MPRs), such as safety and structural strength. Ensure you have a VA appraisal for the MPRs.
Make a purchase offer: Put an offer to purchase a house that meets your needs and MPRs. Remember to negotiate for the best bargain. More so, engage a realtor or attorney to draw up a sales agreement.
Close the deal: Having appraised your finances and with VA appraisal, the lender loans you the finances. You can then purchase the house and move into the property.
VA loans have unique features and generous terms. Veterans and their families should consider using VA loans as the preferred method to own a home.
For more information, reach out to a company like Dominion Capital Mortgage.
Share22 April 2021
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