A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). The Veterans Benefits Administration (VBA) provides federal guarantees for home loans to qualified applicants. To be eligible for a VA-guaranteed home loan, veterans must have served on active duty in the Army, Navy, Air Force, Coast Guard, or Marines.
The specific service requirements will vary, depending on the time period during which a veteran served. A certificate of eligibility is required to obtain a VA loan, and the loan can be obtained through any mortgage lender who participates in the VA home loan program. The VA-guaranteed home loan is one of very few 0% down payment loans available in the United States (the USDA Rural Housing Loan is another).
Why a VA Loan?
The terms of VA loans are quite generous, compared to other mortgages and even other federal loan programs. Among the benefits:
Benefits of a VA Loan
No down payment is mandated unless required by the lender, or if the residence's purchase price is above the established property value
There is no private mortgage insurance premium requirement
Closing costs are limited and may be paid by the seller
The lender may not charge a prepayment penalty if the borrower pays off the loan early
Assistance is available from the VA to help borrowers avoid default
The VA Interest Rate Reduction Refinance Loan (IRRRL)
Are you refinancing? Designed to make refinancing easy for those with a current VA loan, the VA IRRRL can help lower or stabilize your monthly mortgage payments. Lower your current monthly mortgage payment by refinancing to a lower interest rate or change your term from an ARM to a fixed-rate term so your mortgage payment stays the same over the life of your loan. You may be able to avoid certain out-of-pocket costs of refinancing by using a no appraisal option. You can also roll applicable closing costs and fees into the loan. Even if you don’t currently have a VA loan on your home you can still refinance with a VA home loan. Take advantage of lower interest rates and a reduced monthly payment, refinance into a new term, or even finance qualified home improvements with a VA loan.
The VA Loan Process
Here’s how our VA loan process works:
Complete our simple mortgage pre-approval letter request
Receive options based on your unique criteria and scenario
Compare mortgage interest rates and terms
Choose the offer that best fits your needs
You Can Use Your VA Benefit More Than Once
This powerful home loan is available for eligible borrowers over and over again. You could even have a VA loan on more than one property at a time.
VA Funding Fee
The VA funding fee is paid by the borrower per loan to the Department of Veterans Affairs to fund the program as a whole. The exact amount depends on your loan and situation, but is typically 2.3% of the loan for first time VA loan borrowers with a 0% down payment and 3.6% for those using the VA loan benefit for a second time. If you put 5% or more down on your loan you may be able to lower the funding fee amount. The VA waives the funding fee for certain disabled veterans, Purple Heart recipients, and surviving spouses.
Concerned about paying the funding fee? You can choose to pay the fee as a one-time payment at closing or roll it into your monthly mortgage payment and pay it over the life of your loan.
Key Points of a VA Loan
A VA loan is a mortgage offered through a Department of Veterans Affairs program.
Available to active and veteran service personnel and their families, VA loans are backed by the federal government, but issued through private lenders.
VA loans have generous terms, such as no down payment, no mortgage insurance, no prepayment penalties and limited closing costs.
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