If you don’t know about VA home loans, don’t be surprised. Despite being one of the best benefits available to veterans, only 6% of qualified veterans have used a VA home loan in the past six years. Many veterans worry that they don’t qualify for the benefit or that the paperwork will take too much time. But don’t worry, that’s what we’re here for! Here are the 5 things you should know before applying for a VA home loan.
Eligibility for the VA home loan depends on length of service, as well as how long ago you served. Veterans who served as long as 50 years ago may still qualify for the loan. To determine eligibility, the veteran must first obtain a DD Form 214. After filling out the form, they should find a VA-approved lender who can request their Certificate of Eligibility or request it directly on the VA eBenefits website. VA loans don’t deny borrowers with low credit scores. Best of all, bankruptcies and foreclosures do not disqualify you from obtaining a VA loan! However, if you have a low credit score, talk with a VA member or consultant before applying. If you don’t know your credit score, you can get your credit score check here.
2. Why VA Home Loans Are Great
Most loans require a 3-5% down payment, which can mean more than $5000 up-front on a $150,000 loan. With the VA home loan, however, you can buy right away instead of saving for that down payment. Even better, you don’t have to worry about steep mortgage insurance prices and you aren’t required to purchase private mortgage insurance! With these VA home loan benefits, you can afford to buy a more expensive house without raising your monthly payments.
3. Your Benefit Never Expires
Let’s say you do get the VA home loan and purchase the house of your dreams, but ten years later, that house isn’t a dream anymore. Maybe you’ve had children, or you need to move for a new job, or you’ve decided to take a much-deserved retirement to California or Florida. Luckily, if you’ve paid off the original VA home loan completely, you can still use the VA home loan program when purchasing a new home.
4. Surviving Spouses May Be Eligible
Your VA home loan won’t expire in the case of death and leave your family with more expenses and less options. In 2015, over 2000 surviving spouses purchased a home with their fallen partner’s VA home loan benefits. However, only non-remarried husbands and wives may be eligible for the benefit. With the VA home loan, they can purchase a home with zero down-payment and without purchasing private mortgage insurance. Of course, this alone cannot make up for the loss of a loved one, but it may help in the grieving process by lessening debt.
5. Lower Loan Rates, and Better Refinancing
VA home loan rates tend to be about 0.25% lower than typical loans. Even better, the VA backs mortgages, which makes them a lower risk for lenders and more friendly towards borrowers with low credit. The VA home loan is also versatile! You can use it to purchase a home, of course, but it can also be used to refinance an existing mortgage, whether or not that mortgage is a VA home loan itself.
With a VA home loan, veterans can reduce their payments and rates with an Interest Rate Reduction Refinancing Loan. This streamlines refinancing and gives veterans easier access to low refinancing rates. And even if you have not qualified for a VA home loan, you can probably qualify for a VA refinance. If you’re not sure how to get started, feel free to consult Prime Credit Advisors—we’re in touch with the VA and VA-approved lenders, and we can get you or your loved ones on the road to a better, more financially secure future! We even offer a 20% discount on our credit repair services to all veterans as a thank you for your service to our country!