Understanding the VA Home Loan

By: TXRB Staff | 29 Jul 2020

Veterans of the US military have lots of benefits available to them when it comes to education, home buying, and even retail/restaurant discounts. Many times, taking advantage of these benefits just requires a little bit of research. So, if you are a veteran or active duty service member, don’t miss out!
You certainly don’t want to miss out on the benefits available to you when it comes to purchasing a home. The VA partially backs a loan for eligible individuals which can open up more attractive loan options like $0 down. How do you take advantage of this opportunity? Simple! Just follow the steps below and give us a call when you want to know more.

  1. See if you are eligible. After all, eligibility is the first step. Find out if you are eligible for the VA mortgage.
  2. Apply for your VA home loan Certificate of Eligibility (COE). You’ll need to present this certificate to your lender in order to take advantage of the VA-backed home loan option.
  3. Find a Lender. Contrary to popular belief, the VA itself doesn’t issue home loans themselves. They simply back the loans that a private lender issues. To find a lender shop around and compare rates and service. Start your search by giving us a call: 972-334-0700
  4. Find a Real Estate agent. The most important quality of a good realtor is trustworthiness. Once you find an agent that you can trust, the process will be much easier than if you attempted to find a home on your own.
  5. Find your new home. After you have found the home that you would like to buy, the usual inspection and appraisal will take place. Additionally, if you are taking advantage of the VA-backed home loan, you will need a VA appraisal as well. This is just to ensure that the home is being purchased at fair market value and that it is eligible for the VA-back home loan.
  6. Receive the ‘clear to close’ from the VA and close on your new home!

Although approximately 24 million veterans use the VA loan – there are many misconceptions and little-known facts that might surprise you.

  • Not all real estate is eligible. Investment properties, fixer-uppers, vacation homes, and commercial properties are all examples of real estate options that might not be available through the VA. It’s best to stick to move-in ready residential properties that you plan to live in. The largest exception to this is multi-unit properties that you plan to occupy.
  • VA loans can be reused. Although there may be some limitations, many VA loans can be reused. Even if you have filed bankruptcy, gone through a foreclosure, or are still currently using a VA loan, you may still be eligible for another VA-backed home loan.
  • No mortgage insurance. Among the benefits of the VA loan is the avoidance of mortgage insurance. This monthly saving is counteracted in part by the mandatory fees that accompany most VA loans. The mandatory fees are only avoided if you have a service-related disability as the fees themself serve to keep the VA running.
  • No pre-payment penalty. Through a conventional mortgage loan, you may face penalties if you pay extra or pay the loan off early, not with the VA loan!
  • The VA has not set a loan limit, that is determined by the private lender.

Still have questions? Our friendly staff is knowledgeable and always ready to answer your
questions! Give us a call and talk about your options through the VA.

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