A Veterans Affairs loan, or commonly known as a VA loan, is a mortgage loan funded in the United States by lenders and guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued and funded by qualified lenders yet, similar to the FHA, will be insured by the VA for any potential losses incurred in the event of a default. The VA mortgage was designed with veterans in mind – those who put their lives, freedoms, and liberties on the line to serve this country and all those who live in this country. It was designed to offer long-term financing to eligible American veterans or their surviving spouses so long as the spouse does not re-marry.
VA loans are backed by the government, specifically by the U.S. Department of Veterans Affairs. They are a very affordable mortgage option for qualified veterans, their spouses, and come with the option of a fixed or adjustable rate mortgage. These often require no down payment and have lower closing costs, which can help keep your savings secure. Most costs can be rolled into the loan.
If you’re a military veteran or still in active service, you may qualify for a U.S. Department of Veterans Affairs (VA) loan.
VA loans are ideal for qualified veterans, service members, and their spouses so long as they do not re-marry. These loans provide low interest rate, low cost loans that are designed in appreciation for service members and military who have served or currently serve the United States of America.
Your payments can be fixed or adjustable depending on whether or not the VA loan is a fixed-rate mortgage or an adjustable rate mortgage. You will need a Certificate of Eligibility that is issued by the VA and will need to meet the guidelines of type and length of service. Generally, a minimum FICO score of 620 is needed for VA loans. And the VA Funding Fee may be rolled into the loan; more so, you may not have to pay the VA Funding Fee if you have a service-related disability, you have received VA disability or currently receive VA disability, and/or are a surviving and qualifying spouse.
• Your monthly payments and interest rate may generally be lower than other alternative mortgages.
• You can qualify with a lower credit score and more debt when compared to other mortgage programs (up to 60% debt-to-income ratio).
• You will not need to pay mortgage insurance, which is a big advantage.
• If you currently have a VA loan, you may be able to refinance through an Interest Rate Reduction Refinance Loan or a VA Streamline loan to either get cash out, reduce your interest rate, and/or convert from an adjustable rate mortgage to a fixed-rate mortgage.
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