Advantages of a VA Home Loan
Honoring those who serve with the mortgage perks they deserve.
The VA Home Loan Program is one way our nation recognizes the service and sacrifice of the men and women in our Armed Forces. Remember that although these mortgages are commonly referred to as Veterans Administration Loans, eligibility extends to Active Duty Military, National Guard and Reserve members, and qualified surviving spouses of Veterans.
What is a VA loan?
The program is a loan guaranty benefit provided by the U.S. Department of Veterans Affairs. The VA makes it possible for lenders to provide loans to eligible Servicemembers, Veterans, and their families by guaranteeing a portion of the loan. It was created as part of the Servicemen’s Readjustment Act of 1944, known as the GI Bill, to help soldiers returning from World War II re-enter civilian life. Other benefits included 52 weeks of unemployment compensation, payment for education and training, and loan guaranty programs for businesses and farms.
The many attractive and helpful features of the Veterans Administration (VA) Home Loan Guaranty Program continue to this day.
- No down payment – One of the greatest advantages of a VA loan is the ability for the borrower to buy a home with 0% down. As long as the purchase price doesn’t exceed the appraised value, 100% financing is typically available, subject to qualification.
- No mortgage insurance – Because the VA guarantees these loans, there is no monthly mortgage insurance. However, there is a VA Funding Fee, which can be financed into the loan amount. The VA Funding Fee is waived for qualifying Veterans with service-related disabilities.
- No loan limits – Before January 1, 2020, VA loans were subject to conforming loan limits. This made it difficult for Veterans living in high cost markets to use their loan benefits. This restriction was lifted and there are currently no limits on VA loans.
- Competitive rates – The VA loan guaranty also means rates can be very competitive with comparable loans. Talk to your licensed CrossCountry Mortgage loan officer to learn more.
- Lifetime benefit – There’s a common misconception that the VA loan benefit is for one-time use only. Not true. There are strict guidelines governing eligibility, but generally speaking, as long as the property purchased with the previous VA loan has been sold and the loan paid in full, eligibility will be restored. There are exceptions that may provide greater flexibility.
- Some fees prohibited or limited – The VA sets a 1% limit on the lender origination charge and prohibits certain fees entirely. The seller can pay some closing costs, and always pays for the VA-required termite report.
- VA refinance loans: IRRRL and cash out – This may look like a typo, but IRRRL stands for Interest Rate Reduction Refinance Loan, also known as a VA streamline refinance. It’s designed to save you money by refinancing a current higher-rate VA loan to a new VA loan with a lower interest rate. A VA cash out refinance, like other cash out refi loans, allows you to tap the equity in your home. To be eligible for either loan, you must have a VA loan and you must either live in the home now or have lived in it previously.
CCM is proud to offer VA home loans
There are specific requirements and guidelines for all VA loans, so it’s important to work with a lender who has thorough knowledge of the program. If you are considering a VA loan for a purchase or refinance, your licensed CrossCountry Mortgage loan officer is here to help. Call or email today to review your options.