VA loan is the most useful benefit provided by the veteran affairs department to the disabled veterans. There are certain requirements that must be fulfilled before applying for loan benefits. Loan will be provided for different things such as loan to buy home, or renovate the old home, etc. VA home loan service makes the living easier for millions of veterans as they can buy and live in their own homes. The process of loan is very easy and instructions are also provided on every step to the veterans. Out of box, veteran loan is the most valuable benefit from the department.
VA loan and Types of VA Loan
This article will offer an in-depth explanation about the process and instructions of veteran affair loan.
VA home loan basics
Veterans can get the basic VA loan from the private lenders. These loans are backed by the veteran affairs department USA. There is advantage of this loan as there is little to no down payment. The department has helped millions of veterans to build and own their homes. Military men and women have been benefited by this home loan basics provided by the veteran affairs department.
VA home loan vs. conventional home loans
VA home loans are very beneficial as there are no down payments for this. Conventional home loans are different from VA home loans. For conventional loans one has to pay about 20% down payment which can be difficult for the person and their family members. You can save hundreds of dollars every month if you are using VA home loans as compared to the other.
The important difference between both is that the VA loan is backed by the government while the other is not. The rates of VA loan are much better than conventional loan so that you can save money. The requirements for the VA loan can be easily fulfilled while the conventional loan has difficult criteria.
Types of VA loans
The veteran affair department provides variety of options to the service members that will help them purchase their home, refinance mortgages, and renovation loans. Below are some of the loan options provided by the department:
- VA Purchase loan; it allows the service members to take the loan from the veteran affair department without down payment
- Interest rate reduction loan; it will refinance the already adjustable interest rate to a fixed rate. It also helps the users to replace the VA mortgage with the VA loan
- Energy efficient mortgage of VA; that allows the members to finance the home improvement with proper energy efficiency
- Cash out refinance for veterans; it also helps the veterans to replace their mortgage with the VA loan easily
- VA rehab and renovation loan; it covers all the costs required for home improvement and renovation
VA loan funding and loan limits
Almost all of the VA loan options from the veteran affairs department come with the funding fees. This fee is then submitted to the veteran affair department directly. This fee is not payable by everyone as the veterans with service related disability are not required to pay this fee. The fee amount is very less as it ranges from 2% to 3.3% only. The closing cost for the VA loan are also very less. Before there were limits on the VA loan but after 2020, these limits were ended. So now every veteran can apply for the VA home loan.
Who is eligible for VA loan?
A veteran who has served in the military for 90 days or more is eligible for VA home loan benefits. Similarly, a veteran who has been in different services such as Guard members are also eligible for home loan benefits.
Following are the qualifications that must be fulfilled by the veterans to get VA home loan:
- 90 days of active duty must be completed by the veteran applying for VA loan
- Services in reserves and national guard for at least 6 years or more
- 181 days of service are required for the veterans who have served in the peacetime
- The spouse of military member who died in the active duty or died due to service related disability