10 VA Loan Tips You Should Know

Dated: 08/01/2019

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There were around 21 million U.S. veterans as of 2018, according to data from the Department of Veterans Affairs but only 6% bought a home using a VA loan in the past 5 years.

That percentage could be much higher if our veterans are aware of these 10 facts about VA loan.

  1. VA Benefit Never Expires.                                                      Eligibility is based on the length of time served in the military, and the period in which you served. Once earned, your eligibility never goes away.                                                                  To check eligibility, first obtain a DD Form 214;which can be requested directly from VA’s eBenefits website
  2. No Down Payment, No Mortgage Insurance.                          Unlike other loan programs, VA loan does not require you to come up with a down payment. None whatsoever. With VA loan buyers avoid steep mortgage insurance fees. In regular loans at 5% down, PMI costs $150 per month on a $250,000 home. With a VA loan, a buyer will be able to afford a home worth $30,000 more with the same monthly payment, simply by eliminating PMI.
  1. Multiple Benefit Use.                                                                            A VA loan can be used many times if paid off.
  2. Surviving Spouse May Be Eligible.                                              More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2018 alone. Un-remarried spouses can buy with no down and the funding fee is waived.
  3. VA Loan Rates Are Lower.                                                                 VA loan rates are typically 0.25% lower than a conventional loan. The VA backs the mortgages, which have the lowest foreclosure rates of any loan type, making them a lower risk for lenders. Those savings are passed on to Veterans.
  4. Buy, Refinance or Tap Into Home Equity.                                      VA loan can be used to refinance an existing loan, whether or not it's a VA loan. Homeowners with a current VA loan can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal or even pay stubs, W2s or bank statement. The VA streamline refinance, gives vets, a faster, cheaper way to access lower refinance when rates fall.
  5. VA Loans Are Available From Local Lenders.                                VA loans are available from private companies, not the government itself.
  6. Lenient Guidelines For Lower Credit Scores, Bankruptcy or Foreclosure.                                                                                      Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan. Many homeowners across the U.S., military, and civilian, experience bankruptcies and foreclosures. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again. The exception is, a foreclosure involving a VA loan. A vet will need to pay back the amount owed on the foreclosed VA loan to regain eligibility.
  7. Funding Fee Waivers.                                                                          VA typically charges a funding fee to defray the cost of the program. The fee is between 0.50% and 3.3% of the loan amount, depending on service history and the loan type. However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
  8. Buy A Condo With A VA Loan.                                                            VA loans are eligible for many types of properties including a single-family home, a home of up to 4 units, and manufactured homes. But condominiums are commonly overlooked by VA home buyers. The VA maintains a list of approved condominium communities; and their association requirement are much easier than Fannie or FHA! It’s not a short list; there are more than 9,000 communities in California. Searches are by city, state or condo name on VA’s condo search tool.            

If you or someone you know is looking to make a move, let me know! I can answer questions about the area and help you find your family’s perfect fit!

For lending questions please reach out to:

Casey Peek

Senior Loan Originator

P -  858.688.5208

F -  858.408.9497

NMLS-779577

DRE-01894043

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Cecil Austria

Cecil Austria and RE/MAX Liberty are North San Diego-based realty team, serving greater San Diego and Riverside County who pride themselves as VA specialists. Cecil Austria is a current member of the ....

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