As we pause this Memorial Day to honor the brave men and women who have served our country, it’s also an opportune time to highlight the benefits available to them and their families. One such benefit is the VA Loan, a powerful tool that helps veterans achieve the American dream of homeownership. I spoke with Cole McCollum, a loan officer with United Home Loan Services, Inc. Cole helps you delve into the specific advantages of VA loans and why they are an invaluable resource for those who have served our nation.
VA Loan Benefits at a Glance
1. No Down Payment Required and Flexible Credit Requirements
VA loans allow eligible veterans to purchase a home with zero down payment, making homeownership more accessible, especially for those without significant savings. Additionally, the VA tries to make the credit requirements as flexible as possible as a benefit to the veteran. This flexibility allows veterans to potentially obtain 100% financing down to a 550 credit score. For those with scores between 500 and 549, a minimum of 10% down payment and 6-12 months of reserves are required.
2. No Private Mortgage Insurance (PMI)
Unlike conventional loans, VA loans do not require private mortgage insurance, reducing the overall cost of the mortgage.
3. Exemption from VA Funding Fee for Disabled Veterans
Disabled veterans are exempt from the VA funding fee, which further reduces the cost of obtaining a mortgage.
4. Lower Interest Rates
VA loans often come with lower interest rates compared to other loan programs, leading to significant savings over the life of the loan.
5. Eligibility for Surviving Spouses
Surviving spouses of veterans may also be eligible for VA loans, providing financial support and stability.
6. Multiple VA Loans and Reuse of Entitlement
Veterans can potentially have more than one VA loan at a time. Additionally, they can obtain VA loans multiple times, transferring their entitlement from one loan to the next.
7. High Pre-Approval Amounts
VA loans can potentially grant the highest pre-approval amounts compared to other loan types, giving veterans greater purchasing power.
8. Seller Credits for Paying Off Liabilities
The maximum seller credit for VA loans is 4%. VA loans are unique in that seller credits can be used to pay off liabilities such as credit cards and auto loans.
9. Lower Closing Costs
VA loan closing costs are generally lower than those for other types of loans, making the home-buying process more affordable.
Cole McCollum with United Home Loan Services says that VA refinancing options are specialized and can be very attractive to homeowners.
10. Interest Rate Reduction Refinance Loan (IRRRL)
The IRRRL, also known as the VA Streamline Refinance, allows homeowners with existing VA loans to refinance at lower interest rates with less paperwork and faster processing. This can also include shortening the loan term or converting an adjustable-rate mortgage (ARM) into a fixed-rate mortgage.
Applying for a VA Loan
To apply for a VA loan, eligible veterans, active-duty service members, and certain members of the National Guard and Reserves must first obtain a Certificate of Eligibility (COE) from the VA, or supply your DD Form 214 to your lender for them to order your COE. Surviving spouses may also qualify. Once the COE is secured, a VA approved lender can confirm your entitlement and pre approval amount.
Memorial Day is a time to honor the sacrifices made by our military service members. The VA Loan program is one way our nation expresses gratitude and provides support to those who have served. By offering significant financial advantages and facilitating homeownership, VA loans help veterans build stable, fulfilling lives post-service. If you or someone you know is eligible, Contact Cole to explore the benefits of VA loans and then Contact April to get your house hunt started.
