VA Home Loan: Facts, Benefits, and Requirements
A VA Loan, also known as a Veterans Administration Loan, is simply a guaranteed home loan. It is actually a guarantee to the Lender. The VA will guarantee that the Lender will be paid even if the buyer defaults on the loan. Since the VA does not actually lend the money it cannot guarantee that any given buyer will qualify for a loan. The VA home loan program is the preferred loan program for members of the U.S. Armed Forces including all active, non-active, National Guard, Reserve and/or retired armed forces members. As with any other loan, a VA loan comes with benefits and requirements, which are listed below.
Living in Arizona or the Phoenix valley and interested in applying for a VA loan? Check out these great benefits.
First lets take a look at some of the great BENEFITS available through an Arizona VA loan:
- VA eligible borrowers can obtain 30 Year Fixed or 15 Year Fixed loans.
- The Seller can pay up to 4% of the veterans closing costs. Seller can even pay down Buyer debt to help lower the buyer’s debt-to-income ratio, enhancing the buyer’s qualifications for obtaining a loan.
- You don’t need perfect credit, and interest rates are very similar to FHA rates.
- You can use this loan to purchase a new home or refinance an existing mortgage.
- There is a limitation on Buyer closing costs and the Seller is required to pay certain closing costs.
- Best of all, NO down payment and NO PMI, or Private Mortgage Insurance are required!
There are some REQUIREMENTS of service that are covered below:
- Veterans who served during wartime must have been active duty for a minimum of 90 days
- Veterans who served during peacetime must have been active duty for a minimum of 181 days
- Veterans who served in the National Guard or Reserves must have served for a minimum of 6 years to be eligible
- You cannot have been dishonorably discharged.
- A surviving spouse of a deceased veteran who died on active duty or as a result of a service connected disability IS eligible for this home loan benefit.
- However, the children of a living or deceased veteran ARE NOT eligible for the home loan benefit.
- A Certificate of Eligibility or COE will be required to determine VA entitlement. You can get one online by going to this VA webpage
- A statement of service will be required for active military personnel and discharged veterans will need their DD214.
- A standard form 180 mailed to the appropriate custodian of military service records is used to obtain proof of military service.
Here is an itemization of fees and closing costs on VA borrowers cannot pay:
- Real estate agent or brokerage fees or commissions related to the VA loan.
- FHA or HUD inspection fees for builders.
- Second appraisals used for the intent of reconsidering a value.
- Lender underwriting fees.
- Escrow fees from the title company.
- Any fees related to re-inspections of the property to determine VA conformity.