Veterans Home Loan Primer
// // ‘);document.write(String.fromCharCode(60,47,83,67,82,73,80,84,62));
// ]]>
In case you are unfamiliar with the Veterans Home Loan program, here is a little description. The program got started in 1944, through the GI Bill of Rights. The VA program provides the veteran with a federally guaranteed loan to buy a house, and they can possibly get the loan (under most circumstances) without any down payment.
The most important part is that lenders are generally agreeable to processing this type of loan, and because they are guaranteed by the government, there is no need for the usual collateral such as a down payment. This helps servicemen and servicewomen who are getting established in their civilian lives get into a home they always wanted, which they may not be able to purchase otherwise.
A loan under the Veterans Home Loan program is like any regular loan in many ways. The rates that you can find are generally the same, and options of fixed or variable interest rates and terms are comparable. There is a small drawback in that there is a fee, called a funding fee, which was put into effect by Congress in the early 1980s. The funding fee can be from one and a quarter to three percent, depending on time in service and whether it is a first loan or not. Although the average fee is at about two percent, lenders will reduce the rates if the person can pay at least 5% down.
The VA loan program is available to veterans, people who are in the service currently, reservists and National Guard personnel, and persons who are U.S. Public Health Service personnel. The government not only limits the closing costs, but also prohibits lenders from requiring private mortgage insurance. This saves thousands over the life of the loan.
The first step in getting a loan under the Veterans Home Loan program is to get a Certificate of Eligibility. To qualify for this certificate you have to fall into these categories. Active-duty veterans who were discharged during or after WWII, with honorable status. Veterans with a minimum of 90 consecutive days of service in a major conflict. For military or other qualified service during peacetime, who have at least 180 consecutive days of service. Enlisted personnel who joined the service after 1980, or officers who started after 1981 and served for at least two years.
To get a VA loan you can start the pre-qualification process with an approved lender. By pre-qualifying you can find out the size of loan you can get. When you find the right home you and your Realtor would then set up the sales contract indicating that you will be using a VA loan. Fill out a loan application, and when it is approved by the lender the closing will just be a routine matter of signing some legal documents. Your eligibility certificate will then be updated showing that you have an active loan. If you ever sell your home, you can reinstate your eligibility status easily.
The Veterans Administration has detailed information on VA Loans, determining your eligibility and can provide answers to any other questions. You can contact the VA by stopping in at one of their many local offices or on the internet at the official VA website, va.gov. Reputable lenders will also have the information and forms you need to apply for a Veterans Home Loan if you are eligible, and will be glad to get you going in the right direction.
