If you are a veteran interested in buying a home, you simply can’t afford to ignore the VA home-financing program. Some benefits include reduced interest rates and fees, 100% financing available, and no down payment.
Getting a VA backed loan is easy. Follow these five simple steps when purchasing a home, and enjoy the benefits of your service in the Army.
1. determine if eligible
2. sign a purchase agreement
3. order VA appraisal
4. apply for mortgage
5. purchase home
Service members and veterans who decide to buy a house are eligible for a home mortgage guarantee offered by the Department of Veterans Affairs. The VA does not provide the mortgage, rather, it guarantees the mortgage, which minimizes lenders’ risks and reduces their losses in the event of foreclosure. The money comes from private lenders who volunteer to participate in the VA program. Because of the guaranty, lenders are willing to offer mortgage loans larger than what service members otherwise might qualify for.
These loans are made by a lender, such as a mortgage company, savings, and loan or bank. VA’s guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer Army veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether you used some entitlement previously.
With the current maximum guaranty, as of January 1, 2017, an Army veteran who hasn’t previously used the benefit may be able to obtain a VA backed loan up to $424,100 depending on the borrower’s income level and the appraised value of the property. Your local VA office can provide more details on guaranty and entitlement amounts.
More than 29 million veterans and service personnel are eligible for VA financing. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.