There’s no doubt about it – finding and qualifying for a home loan is one of the most stressful parts of your home buying adventure. Finding financing is a frustrating balance between your credit record, available loans and interest rates. If you or your spouse has served or is currently serving in the US Armed Forces, there may be a financing avenue available to you that could alleviate some of your headaches – a VA Loan.
What is a VA Loan?
VA Loans are somewhat misnamed, because the Veteran’s Administration does not actually loan money. What they do is work closely with lending institutions to find favorable financing for veterans and active duty service people. Because of your status as a veteran or active service member, you may qualify for loans with better interest rates as well as lending conditions.
How is a VA Loan Different from a Regular Mortgage?
Some people think that a VA Loan is a guaranteed thing and it is not. A major difference between one of these and a regular loan, however, is that the terms of the loan are more favorable than traditional financing. A VA Loan, for example, does not require the home buyer to make a down payment unless the purchase price of the home is greater than the financing they qualify for or if the lending institution requires one. Also, all loan fees are typically absorbed into the loan so that reduces up-front costs for the buyer. Naturally, these loans are only eligible to current and former service people.
Who is Eligible for a VA Loan?
Not everyone can get a VA Loan. Generally, they are available for veterans and some spouses of deceased veterans. They are also open to people currently serving in the armed forces as well as Reservists and National Guard Members. To find out if you are eligible for one of these loans, contact the Veteran’s Administration for a Certificate of Eligibility.
How Much Can I Get on a VA Loan?
For the most part, you will never be able to get a VA Loan for more than the cost of the home you are purchasing. There are also caps on how much money you can actually borrow. This amount is usually more in cities with a higher cost of living. The amount you will be loaned depends on the home you are buying and your geographic location.
Where Do I Get a VA Loan?
Many conventional mortgage lenders also deal with VA Loans. All you would need to do is locate one who is certified to do so by the Veteran’s Administration. You will first need to obtain a Certificate of Eligibility, which you can apply for at the Veteran’s Administration, before you begin the process of applying for a VA Loan.