The U.S. Department of Veterans Affairs, more commonly known as the VA, is tasked with caring for members of the U.S. military and their families. The organization supports service members, veterans, and their spouses in a variety of ways, including VA home loans. Anyone eligible for a VA home loan should investigate these loans’ benefits before purchasing a house. Although they have extra requirements, they also provide significant perks, so learning how to use a VA home loan can really pay off.
VA Home Loan Guide
VA home loans are mortgages issued by a private lender that are guaranteed by the VA, and they are an attractive option for aspiring homeowners for several reasons. As the VA explains, using a VA home loan provides the following benefits:
- You do not need to pay a down payment unless required by the lender.
- There is no penalty for prepayment. Paying a little extra each month can save you a fortune in interest over the life of the loan.
- Because the federal government will back your loan, you won’t require mortgage insurance. Without the need to pay for this insurance, your monthly payment will likely be lower.
- If you run into financial trouble and are having a tough time making your mortgage payments, you can turn to the VA for assistance. Representatives of the VA can step in to help by negotiating with your lender on your behalf.
How to Use a VA Home Loan
The U.S. Census Bureau reports that some 42,000 new, single-family homes were purchased with loans guaranteed by the VA in 2015. If you are hoping to join the ranks of homeowners utilizing this type of financing, understanding how to use a VA home loan will help you prepare yourself for what lies ahead, so that you can do your part to make the process run smoothly.
Check Your Eligibility
Are you eligible for a VA home loan? Being a service member, veteran, or a military spouse does not necessarily mean that you are entitled to this benefit. You must meet certain minimum service requirements to qualify for this program. To learn more about the requirements and determine if you might be eligible for a VA home loan, visit benefits.va.gov. While there, be sure to check out the other requirements. In addition to your qualifying service, to be eligible for a VA home loan, you will also need to have acceptable credit and income, obtain a Certificate of Eligibility, and select a suitable property that will be your primary residence.
Select a Real Estate Agent
Whenever you are searching for a home, enlisting the aid of a real estate professional is smart. A real estate agent can help you find properties that meet your needs and guide you through the process of purchasing it. To find a real estate professional, you can ask friends and coworkers for recommendations or browse the listings at realtor.com.
Find a Lender
The Veterans Benefits Administration recommends that individuals planning to use a VA home loan identify lenders who participate in the VA loan program before actively searching for a property. Factors like interest rates and points can vary from lender to lender, so shopping around can help you obtain the most favorable terms. In addition, prequalifying for a loan can help you determine how much you can afford to borrow. If you’re interested in VA loans, contact PrimeLending of Kansas City today to discuss your options.
Apply for a Certificate of Eligibility
As the VBA explains, you can apply for a Certificate of Eligibility through your lender, online, or by mail. This important document provides written verification that you do qualify for a VA home loan, and obtaining one is a must if you intend to utilize this type of financing to purchase a home.
Choose Your New Home
Now it’s time to hit the streets and find your perfect residential property! Once you locate your new home, you will need to sign a purchase agreement. The VA strongly suggests that you include a VA option clause that protects you in the event that the property does not qualify for a VA loan after the completion of the required appraisal.
Apply for a VA Home Loan
With your home selected, you can apply for your VA home loan. As Military.com reports, you will need to gather the necessary financial records and complete the actual application for the loan. Once you complete that step, your lender will order a VA appraisal of the property and begin the underwriting process. Ultimately, the lending institution will review the documentation of your financial status and the appraisal and make a decision about whether or not to provide the loan. If the lender approves the loan, you will move forward to the final step in the process of buying a home: the closing.
According to the VA, you should expect your lender to choose an appropriate professional to conduct the closing. During this meeting, you will legally gain the rights to the property.
While figuring out how to use a VA home loan requires a little effort, many service members have used this type of financing to become homeowners. If you are trying to utilize a VA home loan for your home purchase and encounter difficulties, you can contact your VA Regional Loan Center for assistance.
Better yet, if you live in the Kansas City area, contact PrimeLending today. We would be happy to help you learn how to use a VA home loan. Our team is committed to helping you navigate the home financing process, so that you can purchase the home of your dreams. At our branches located throughout Kansas City, we can help you explore our wide variety of loan products and programs, including VA loans. PrimeLending utilizes delegated underwriting, local appraisers, and cutting-edge technology to accelerate the underwriting and closing processes. When you’re ready to learn more, please give us a call at 844-701-5626.