If you’re a veteran or a spouse who is buying a house with a VA loan, then you should pay attention.
You’re in a situation that few of your peers can enjoy. Due to your service or the service of your spouse, the government has rewarded you with this special program established back in 1944 at the end of World War II. While this program has been around for such a long period of time, it’s often overlooked as a home buying option by those with VA loan eligibility. Why is the VA loan important, especially to first time homebuyers?
Keep reading for more information on buying a house with a VA loan.
Potentially No Down Payment
The VA loan program is special in many regards, but the biggest advantage is the amount of funds required in order to obtain a VA home loan. When compared to other loan programs such as FHA loans or conventional loans, the VA loan requires nothing down. Even the FHA program for first time buyers requires a minimum down payment from borrowers. Down payments are not necessary with VA loans except in cases where the mortgage amount exceeds the VA limit for your county. In such cases, the down payment is 25% of the amount above the county VA limit.
Low Closing Costs
And while VA loans have a closing cost unique to the VA loan, called the Upfront Mortgage Insurance Premium, of UFMIP, this fee may be rolled into your loan amount instead of coming out of your pocket, and allows you to spread that closing fee over the term of your loan, up to 30 years in most cases.
Easy Monthly Payments
When compared to low down payment loan programs for first time homebuyers, the VA loan provides a lower monthly payment than any other loan in the marketplace. Not only that, but the VA loan program restricts the types of closing fees that the first time VA homebuyer may pay, reducing the overall amount of funds needed to buy your first home.
Approval Can Be Easy
Finally, getting approved for a VA loan is easier than other loan programs with regards to credit, income, and credit standards.
Getting Started: How to Buy a House with a VA Loan
How do get started with your VA loan?
- First, find a mortgage company that specializes in VA loans. VA loans have a few different guidelines and procedures that other loans do not have. These special nuances aren’t an extra burden and do not make the VA loan harder to qualify for, but the VA loan does have internal characteristics that could cause a few “bumps” during the approval process, unless your mortgage company knows VA loans inside and out.
- Second, find your DD-214, or military discharge document, and make a copy of it and keep it handy. Next, download the VA form 26-1880 and complete the form. This is the official Request for Certificate of Eligibility and can be found here. Complete the information and mail the form. However, it’s much easier to have your VA lender request your Certificate of Eligibility for you as qualified lenders have access to the VA’s online portal that can provide your Certificate of Eligibility with just a few keystrokes.
That’s it. That’s all you need to do to get started. Find a VA lender and start your approval process, and very soon you’ll be in your very first home with one of the most desired loan programs available.