VA Loans – A Great Option for Veterans
VA loans are mortgage loans that are guaranteed by the US Department of Veteran Affairs (VA) and are available to most active duty and veteran US service members and their spouses. The goal of this program is to make it easier for people who served our country to own a home.
- No Private Mortgage Insurance (PMI) is required.
- No down payment is required when buying a home.
- The closing costs can be paid by your sellers.
- If you want to refinance your home, you can refinance it up to 100% of its value.
- You can qualify for a VA Streamline Refinance when you already own a VA loan.
- Since this type of loan is insured by the Government, there is lesser risk to the lender so this loan is easier to get.
- Disabled Veterans can get a waiver of the Funding Fee given that they have received a disability payment or when they are at least 10% disabled.
Who can apply for a VA Loan?
Generally speaking, all those who are on active duty and those who have been discharged honorably can apply for a VA loan.
You can apply for a VA loan when you meet any of the following requirements:
- You have served for 181 days during peacetime.
- You have served for 90 days during wartime.
- You have spent 6 years serving in the National Guard or in the Reserves.
- You are a spouse of a service member who has been killed while serving the country.
- The VA has given you disability payments.
The VA Funding Fee is a fee which is paid directly to the Department of Veteran’s Affairs. This is required so that your loan can be guaranteed by the VA and so that you will be given the chance to get a loan without spending a lot.
How Much is the VA Funding Fee?
The VA Funding Fee depends on several factors. These include:
- Your current status: active duty, guard, reserve or retired
- When it is your first time, second time or a cash-out refinance
- The amount of down payment you’re going to pay
The fee can be from 1.25% – 3.3% of the total loan amount. The more money you pay for the down payment, the lower is the VA funding fee. If you want to know the exact VA funding fee for your situation, feel free to contact us.
Do I need to use my own money to pay for the VA Funding Fee?
Not really. You can have the VA Funding Fee be included in your loan. You can then pay for it along with your monthly payment.
Are there other closing costs (Escrows, Appraisal and Title) which I need to pay?
Yes. However, when you are to purchase a new home, these closing costs can be paid by your seller.
What is the VA Streamline Refinance?
This is a refinance option which can be offered to you when you have a VA loan and you want a lower interest rate without using your own money to pay for closing costs. This does not require you to provide paychecks, W2s or bank statements.