VA Mortgage

Considering a VA mortgage, also known as a Veteran Affairs mortgage? This guide will provide you with essential information on what VA mortgages are, eligibility requirements, and the process of securing one.

A VA mortgage is a home loan backed by the United States Department of Veterans Affairs (VA). While the VA guarantees a portion of the loan, it does not directly provide the financing. Instead, private lenders, such as banks and mortgage companies, offer VA home loans. The VA sets the qualifying standards and terms for these loans.

To qualify for a VA mortgage, you must meet specific service requirements set by the VA. Here are the key eligibility criteria:

• Military Service: You must be either a veteran with an honorable discharge who meets the minimum service requirements, or currently on active military duty.
• Service Duration: You need to have served at least 181 days of active service during peacetime or 90 consecutive days during wartime. Alternatively, you could qualify with a minimum of six years in the Selective Reserve or National Guard.
• Surviving Spouse: If your spouse died in the line of duty, you may also be eligible.

To apply for a VA mortgage, you will need to obtain a VA Certificate of Eligibility (COE). Without this certificate, you cannot proceed with the loan application.

VA loans come with several benefits compared to conventional mortgages:

• Entitlement: Your COE will confirm the VA’s guarantee amount for your loan. Private mortgage insurance (PMI) is not required, but a VA funding fee, which is a percentage of the loan amount, must be paid at closing. This fee helps fund the program for future borrowers.
• Process Overview: Here are the five key steps to securing a VA loan:
  • Prequalification: Begin by finding a VA-approved lender to get prequalified. This process estimates how much you can borrow based on financial factors like credit, income, and entitlement.
  • Preapproval: After prequalification, seek preapproval. This step involves verifying your financial information and will provide a letter of preapproval, demonstrating your seriousness and readiness to purchase a home.
  • Making an Offer: Once you’ve found your ideal home, make an offer and negotiate with the seller. It’s beneficial to work with an agent experienced in VA mortgages.
  • VA Underwriting and Appraisal: Your lender will order a VA appraisal to ensure the home meets VA property standards and fair market value. Simultaneously, the lender’s underwriters will review your financial documents.
  • Closing: At closing, you will sign legal documents and finalize the loan. After this, you’ll receive the keys to your new home!

VA mortgages offer valuable benefits for eligible military members and their families. Understanding the application process and eligibility requirements can help you navigate your homebuying journey with confidence. We hope this guide has clarified how VA mortgages work and how they can assist you in purchasing your new home.