As the home market fluctuates, it may be the perfect time to buy with the VA Home loan. If you are currently an active-duty service member or veteran, there may be a great chance you will qualify.
Utilizing this benefit with a 0% down payment home loan to move into your family's dream home may be exactly what you need.
However, VA Loans are not the same as conventional loans, FHA loans, or other home financing options. They have different criteria, eligibility, qualifications, and benefits that other loans do not have. This is because the Department of Veterans Affairs (VA) guarantees them and places regulations so you can purchase a home without default or hurtles other financing products have.
Whether this is your first time buying a home or your second time using the program, it's essential to understand how VA Home Loans work.
What Is A VA Loan?
The VA Home Loan is an affordable program that is designed to help military families that have served or are currently serving.
The VA Loan provides the incredible opportunity to receive a 0% down payment home with less strict credit score requirements. VA loans also offer access to lower interest rates than other home loans because the VA provides financial backing.
While the competitive real estate market continues, the VA Loan gives you an easy foot in the door, and you don't have to worry about bidding on a home.
Who Is Eligible for a VA Loan?
The VA Home Loan has specific branch and service requirements for veterans and active duty service members to become eligible.
Not all who have served in the Armed Forces qualify for a VA loan.
You must meet at least one of the following criteria to qualify:
· You have served 181 days of active service during peacetime.
· You have served 90 consecutive days of active service during wartime.
· You have served more than six years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 consecutive days.
Eligible Branches of the Military
· Active Duty Service Member
· Current National Guard or Reserve Member
· Discharged National Guard Member
· Discharged Reserve Member
· Surviving Unmarried Spouse of a Service Member
Types of VA Home Loans
VA Loans include three types of loans that determine your mortgage rate, mortgage payments, and loan amount.
The Wood Team can help you decide which option is best for you by explaining each option in light of your current finances.
For example, you may not qualify for the VA Jumbo Loan with a $9500,000 home in California. But your 630 credit score could earn you a $652,000 home if it is within your county's VA Loan Limits.
Fixed-Rate VA Loan
The VA Fixed-Rate will stay the same after completing the rate lock. This means that you are locked into that rate, and it will remain the same throughout the life of the loan.
The Fixed-Rate VA Loan offers a 0% down payment and does not require private mortgage insurance (PMI).
Adjustable-Rate VA Loan
An adjustable-rate VA Loan may be a better option in a fluctuating market. Your rate will rise and fall with the current interest rates. The challenge of an adjustable-rate is that you may be dealing with ups and downs of monthly payments, which can make budgeting hard. Payments may rise and fall over the loan life, but a lender cannot exceed your initial terms over a specific period.
VA Jumbo Loan
When buying in more expensive counties where the VA Loan Limit exceeds $417,000, you must choose a financing loan that can bear the cost. A VA Jumbo loan gives you access to higher home prices, but you will have to meet the minimum down payment requirement and a higher credit score.
Partner with a trusted lender
Apply for the loan
The first step is to reach out to the Wood team to fill out an application. You can do this by coming by our office or filling out the online application.
Submit required documents
You will need a Certificate of Eligibility (COE) and other documentation to be eligible for the VA Home Loan. The Wood Team can help pull this information on your behalf.
Once we receive the necessary documents, we will explain the loan amount, mortgage rate, and loan length you qualify for.
The Wood Team will ensure that you understand your options and that you are picking the right mortgage product for your needs.
Bring in a licensed appraiser
VA Loans do require an inspection of the home like other loan programs; it is required by the lender to help determine whether the property is valued at the same price that you are offering to buy it. Lenders do not want to invest in a home that is overvalued. It may cost you both more money in the long term.
Veterans Affairs has an additional home evaluation you must undergo for the lender to sign off. The requirement stands as another check for the US government to ensure you move into a home that doesn't fall apart.
If the VA is awarding your family the home you've always wanted, they want it to last for years to come.
Celebrate the loan closing
You will be required to pay the VA Funding Fee, appraisal, and other costs when closing on a VA loan. Paying the closing cost will complete the sale of the home, and it will officially be closed.
Call us today to learn how we can help get you into th