VA loans are usually one of the best mortgage option for those who qualify. They are also one of the least understood loan options. Here are answers to six common questions borrowers have about VA home loans.
What makes a VA loan a better option than a conventional mortgage?
VA mortgages offer several advantages compared to conventional home loans and even FHA loans. A VA loan does not require any down payment, and many VA loan borrowers take advantage of this benefit. A VA loan has no private mortgage insurance and the interest rates tend to be more competitive.
Who is eligible for a VA loan?
Veterans are not the only people who are eligible for this loan option. Other classes of military personnel such as Reservists and National Guard members may also be eligible. Surviving spouses of veterans might also be able to obtain a loan. There is a minimum term of service required in most cases.
What type of home can I buy with a VA loan?
VA loans can typically only be used to buy a primary residence, not a rental property. A VA home loan can be used to buy a new construction home, single-family home, condominium, manufactured home, or a 2-4 unit property.
Can I refinance a VA loan?
The VA loan program has a streamline refinance program similar to that offered by the FHA. The Interest Rate Reduction Refinance Loan (IRRRL) allows you to refinance your existing VA loan to obtain a lower interest rate and lower your monthly payment. You can refinance into a fixed-rate loan or an adjustable-rate mortgage.
Is there a minimum credit score to qualify?
There is no minimum credit score necessary for a VA loan, but the majority of lenders that originate the loans do have a minimum score you must meet. Every lender has their own benchmark, but most VA-approved lenders want a score of at least 620.
Buying a home can be a stressful situation, especially if you are unsure about the financial aspect. VA loans can help many people who are qualified. Answers to these common questions can help you better understand VA loans and how you can benefit.
Informational credit to Low VA Rates.