VA Mortgages

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What is a VA Loan?

The VA Loan began in 1944 through the original Servicemen’s Readjustment Act, also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt, provided benefits to World War II Veterans. The VA guaranteed loans were made by non-public lenders like banks, savings & loans, and mortgage firms to eligible Veterans for the purchase of a home. The Veteran must use the dwelling for their own personal occupancy. The guaranty means the lender is protected against loss if the Veteran or later owner fails to default on the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

Who is eligible for a VA Loan?

Wartime Conflict Veterans who were not dishonorably discharged, and served a minimum of ninety days.

World War II – (September 16, 1940 to July 25, 1947)

Korean Conflict – (June 27, 1950 to January 31, 1955)

Vietnam Era – (August 5, 1964 to May 7, 1975)

Gulf War – (August 2, 1990 – through a future date to be set by law)

Afghanistan & Iraq – ( See Chart established by VA)

Military Reserves and National Guard members who completed six years service (still serving and or honorably discharged) may be eligible.

Peacetime Service

181 Days of continuous active duty with no dishonorable discharge

July 26, 1947 to June 26 1950

February 1, 1955 to August 4, 1964 or May 8, 1975 to September 7, 1980 (enlisted) or to October 16, 1981 (officer).

Enlisted Veterans whose service began after September 7, 1980 or officers service began October 16, 1981, (should have served a minimum of two years).

What type of home will I be eligible to purchase with a VA loan?

A VA home loan is used to purchase your personal residence in the United States or it’s territories. The VA home loan enables you several options for the eligible type of home you may purchase.

Existing single family home.

Townhouse or condo in an existing VA approved housing project.

A manufactured home and/or lot.

Home refinances with eligible types of home improvements.

How do I apply for a VA guaranteed loan?

You may apply for a VA loan with any mortgage lender who participates and is approved by the US Department of Veteran Affairs. During the VA loan process, you will be required to produce your Certificate of Eligibility. If you do not have your certificate, you may request a certificate with a VA Eligibility Center by completing the VA Form 26-1880 including proof of military service. In some cases the VA may have your proof of eligibility of record without further documentation.

I have already had a previous VA loan. May I apply for another VA loan?

Yes, your VA eligibility is reusable with certain restrictions. If your home was sold and your existing VA loan was payed off from the sale proceeds, you may request eligibility using VA form 26-1880 and once again apply for a new VA loan. Additionally, you should keep any paperwork acknowledging payment in full of your VA loan. ( e.g. Release of Mortgage or Order of Satisfaction, Hud 1 Settlement Statement or Disclosure, and a Statement from Lender ).

What are the negatives of a VA loan?

VA loans made prior to March 1, 1988, were assumable with no qualification of the new buyer. If default would ever occur, the Veteran who sold the property would be at risk for the original terms of the assumed mortgage note. Some seller’s may be hesitate to agree to such assumption knowingly they would be forced to wait longer for a buyer with conventional type of financing. Further, sellers are typically asked to pay a portion of closing costs which may influence the overall contract price. An upfront funding fee in the amount of .50% of the loan amount on a refinance and a 3.0% charged to the Veteran for a purchase.

What are the advantages of a VA loan?

100% Financing. No down payment required.

No Private Mortgage Insurance(monthly) – No PMI

No Prepayment Penalty (paying loan off early).

Competitive Interest Rates

Loan Qualifications Are Typically More Lenient Than Conventional Loans

Seller Closing Cost Contributions

First-Time Buyers Are Our Specialty!

For all our clients, especially first-time home buyers, we go out of our way to ensure that our clients are familiar with the mortgage process. You’ll be able to find out what loans you are eligible for as well as how basic the requirements are. As well as knowing which documents you will need to submit, you’ll also know how to proceed. Our experienced loan officers will walk you through the entire process from application to close and answer all your questions until you feel at home with your mortgage choice.