Let us show you How a VA Home Loan May Be the Key to Your Future and Future Home
If you are a veteran, an active duty service member (of any military branch), or the surviving spouse of a deceased veteran, this program was designed with you in mind.
The U.S. government sought to assist returning service members purchase homes for themselves and their families. This removed a huge barrier between our honored veterans and homeownership.
Ideal Lending, a division of American Financial Network, Inc. proudly provides quality VA Home Mortgages and VA Refinancing Loans for America’s Military Families. We’d love for you to be part of our family too.
In this helpful blog, you’ll find information about VA Home Loans and the answers to commonly asked questions.
What is a VA Loan?
A VA Home Loan is a mortgage product offered by banks and other financial institutions, guaranteed by the United States Department of Veterans Affairs. The purpose of the program is to increase access to homeownership and increase financial stability for America’s veterans and to offer exclusive benefits in acknowledgment of their service. The program has guaranteed more than 22 million loans to help veterans, active-duty military members, and their families purchase homes or refinance their mortgages. Ideal Lending is an established and experienced provider of VA Home Loans and we would be proud to serve as your lender.
How do I know if I’m eligible?
Any Veteran who meets the length-of-service minimum is actively serving or is acceptably discharged (qualifying character of service) is ensured equal access to apply for a VA Home Loan (purchase and refinance).
Certain reservists, National Guard personnel, and surviving spouses may also be eligible. There are other groups of individuals who may qualify (for a complete list, contact the VA at 877-827-3702 or go to benefits.va.gov). The best way to determine if you qualify is to apply, so don’t wait.
Possible advantages of a VA Home Loan
- No Credit Score Threshold Requirement*
- No Down Payment Required (In Some Cases*)
- No Pre-Payment Penalties
- No Monthly Mortgage Insurance Requirement
- One Time VA Funding Fee May Be Folded into the Loan
- Veterans Receiving VA Disability Compensation Are Exempt from the VA Funding Fee
- VA Limits Certain Closing Costs for Veterans
- Closing Costs May Be Shared by the Lender
- VA Guaranteed Mortgages Are Assumable
- Refinancing Available
- Access Cash Value of Home Equity With Little or No Out of Pocket Costs
- You may be able to reuse your VA Home Benefit
- VA Home Loans May Be Approved to Purchase Pre-Construction Housing
***Borrowers must meet VA credit standards requirements
The VA Home Loan Guaranty
VA Loans are backed by the federal government. This guarantee provides lenders the assurance that, if for any reason, you were to default on your home loan, the government would assume the mortgage. With less risk, we may be able to assist Veterans
- Purchase or Build a New Home or Condo
- Obtain a Lower Interest Rate with an Interest Rate Reduction Refinance (IRRRL)
Competitive Rates, Flexible Terms
A federally-backed VA loan may enable Ideal Lending to offer competitive interest rates and flexible terms. Interest rates are based on your credit rating, or what is also known as your FICO score. The better your score the better the rate may be. Factors that may affect interest rates include, but are not limited to:
- Your Credit Score
- Your Debt-to-Income Ratio
- Current Market Conditions
- The Length or “Term” of Your Loan
Can I access a VA Loan for Refinancing?
Yes! If you are eligible to apply for a VA loan, you may also be eligible to refinance a subprime, FHA, or conventional mortgage for up to 100% of the property value. You may be charged a funding fee if this is your first time accessing the VA loan program (under certain circumstances such as a service-related disability, you may be exempt from this fee). This may allow you to secure a competitive interest rate. In addition, you will not pay for monthly mortgage insurance or out-of-pocket closing costs.
If you have an existing VA Home Loan, you may be able to refinance at a lower interest rate with little to no out-of-pocket cost with an ‘Interest Rate Reduction Refinance Loan’ (IRRRL). This is also known as a VA to VA loan, a rapid refinance or a streamlined refinance. Generally, a VA to VA refinance will not require an appraisal. A new Certificate of Eligibility (COE) is not required for a VA to VA loan.
Under the Veteran’s Benefits Improvement Act of 2008, veteran borrowers also have a “Cash-Out” refinancing option. This allows qualifying borrowers to access the cash value of their home’s equity (an appraisal is required). You may be charged a funding fee if this is your first time refinancing (under certain circumstances such as a service-related disability, you may be exempt from this fee)
How much am I able to borrow?
One of the great benefits of a VA Home Loan is the generous amount you may be eligible to finance. The VA will guarantee loans up to $647,200 with $0 down payment in most areas and up to $970,800 with $0 down, in high-cost areas.
You may be able to find out if you live in one of these high-cost areas by consulting a loan officer or visiting the VA’s website. You can also choose to make a down payment, even though it’s not required. If you do, your lender may choose to loan you a higher amount than the above-stated maximums.
What will I need to submit with my application?
The documents needed to apply for a VA Home Loan are essentially what you would expect to submit for a traditional mortgage application or other large credit purchase, with the addition of verifying your veteran’s status and eligibility. You will need a COE. You can apply for a COE directly with the VA (benefits.va.gov) or through Ideal Lending. Ideal Lending is committed to making the process as quick and easy as possible for our valued military families and veterans. Let us show you just how simple it can be to get the keys to your new home.
Why Choose a VA Loan over a traditional mortgage?
Proudly serving your country may have been a very easy decision but it wasn’t an easy task. Our military families make huge sacrifices for the good of our nation, and your veteran’s benefits are a way for the American people to say, “Thank you for your service”. Your eligibility to apply for a VA guaranteed loan is one of your many veteran benefits which we strongly encourage you to access. Let’s make some comparisons.
VA Loan vs Conventional
Your VA Home Loan
- No Down Payment Required (In Some Cases) – You’re free to submit your application right away and start living the next chapter of your life without delay.
- Competitive Interest Rates – Because the VA loan guarantee lowers the lenders risk, the rate offered on your loan may be lower than that of a conventional.
- May Be Easier to Qualify for a VA Home Loan – The VA guaranteed loan requires less stringent qualifications, making an approval more likely in some cases.
- No Private Mortgage Insurance (PMI) – Because VA loans are backed by the U.S. government, the lender will not require you to purchase PMI, potentially saving you a significant amount of money.
Non-VA Conventional Home Loan
- A conventional loan may require as much as 20% of the purchase price to be paid upfront, which may delay your ability to apply until you have saved the necessary amount.
- Conventional loans come with risk for the lender. This may lead to a higher interest rate depending on your qualifications.
- A non-VA conventional loan is not government-backed and may carry greater risk to the lender.
- When a lender finances more than 80% of a conventional mortgage, they can require the borrower to purchase Private Mortgage Insurance to protect the lender from risk and potential losses, adding to the cost of owning the home
Whether you’re looking to buy your first home, your next home, access your home’s equity, or just get a better interest rate, Ideal Lending would love to be your lender of choice. We’re consistently investing in new technology to streamline the lending process, secure your data and make the lifelong experience of owning a home, fun.