VA Loans: What Do I Need To Know?

Veterans Affairs

There are plenty of loan types in the market today, with each one targeting a specific financial profile. It is a given that loans can be enemies to anybody who doesn’t come prepared. Committing to paying off money in the present up until the distant future requires a lot of research, financial alertness, and mental maturity. It’s also very understandable why so many people shy away from the discussion of loans or have a stigma about what these are about.

With enough savings and a thorough understanding of loans, one will understand that the very aim of a loan is to help you build your way to—not just home equity—but financial stability as well. The very reason why loans last for years and years, decades even, is for a borrower to have enough time to pay for what they can at the moment. These loans come in terms and it is up to the borrower what they choose to sign up for.

That mentioned, it is best to reiterate that there loans for every individual with a steady cash flow. Alternatively, there is a very specific home loan type intended for veterans and military personnel. The Veterans Affairs home loan is one that calls for little to zero down payment. Moving forward, this loan is exclusive to those who have helped in fighting for our country and keeping it safe; occasionally also extending up to the spouses of veterans. Just like Federal housing Administration home loans, VA mortgage loans are insured by the federal government. They do not directly fund borrowers by issuing checks and letting out envelopes of cash. Rather, the U.S.Department of Veterans Affairs insures the mortgage VA-approved private lending institutions give out. This is put in place to help safeguard these commercial lenders, should a borrower default at any point for whatever reason.  

To substantiate, the VA home loan concept began in 1944 and was inclined to helping our brothers and sisters in the military to purchase homes without the need to display founded credit.

Presently, the USDVA has insured millions of VA mortgages and has helped shelter waves and waves of military families and the like. Given the fluctuating rhythm of economics in real estate, many lending arms have tightened their qualifications and have raised their standards in loan grants in recent years. As a result, only a select few qualify. The VA home loan program has been the go-to choice of many veterans and their spouses because of the privilege it presents. But just like other loans and promos, there are prerequisites.

Also similar to other FHA and commercial loans, the loan limits are determined by county limits and these may vary by area. In a lot of counties, a VA loan can allow a borrower to buy a home priced at a maximum of $435,100 with no required down payment. Despite that, houses pricer than the aforementioned and are available for purchase in high-cost counties can still be purchased with no deposit needed, according to 2017 VA loan limits—again limits differ depending on where you choose to reside.

With all this information, can a veteran now just own a house without letting out a single cent?

The direct answer to this is no. A Veterans Affairs funding fee will be required to successful borrowers. How much this fee will cost will depend on what the borrower’s position is in the military, the presence of a down payment made in cases that call for it, and if it’s the first time a veteran has availed of this benefit. The VA funding fee can be included in the loan and can be paid for together with monthly mortgage fees.

That said, not everyone qualifies for this home loan program. A borrower should meet at least one from the list below:

  • They have served 90 successive days or active service over wartime.
  • They have delivered 181 days of operating service over peacetime.
  • They have more than 6 years of rendered service in the National Guard or Reserves.
  • They are a spouse of a military personnel who has died over war or has died as an outcome of a service-caused disability.

For More information about VA loans and Texas Veterans mortgage, don’t hesitate to reach out to us by clicking on the link.

BY BJORN