VA loans exist to make homeownership accessible and affordable for Veterans, service members, and surviving spouses. The program has helped millions of Americans secure home financing since its creation in 1944. As an approved VA Lender, Homestead Funding Corp. has provided VA loans to thousands of clients throughout our history. To learn more about why we believe in this program so strongly, let’s explore seven things you should know about VA loans.
Conventional loans can be as little as 3% down payment, but in most cases have Private Mortgage Insurance (PMI). VA loans have a funding fee instead of required mortgage insurance. This fee goes directly to the Department of Veterans Affairs and help to cover lenders’ losses. If a borrower defaults, the VA steps in to pay off a portion of the loan.
Not everyone is required to pay the VA funding fee, although a borrower must put in an application to be Funding Fee Exempt. Your Loan Originator can assist in this process and will be notified when your exemption is approved.
The people exempt from VA funding fees are:
Since the Department of Veterans Affairs only oversees the loan program and does not issue loans, the agency doesn’t set or enforce credit score minimums. Credit score cutoffs for loans can vary, but the minimums for VA loans are typically lower than what borrowers need for conventional mortgages.
Also known as a Lifetime Benefit, Veterans who qualify for a VA loan can use the program repeatedly for the rest of their life. If you’re ready to sell a home and have paid off the loan in full, a VA borrower has their full entitlement restored and available for another purchase.
Those that qualify can take out more than one VA loan at the same time as long as their entitlement remains. Each VA member has a specific amount of money they’re “entitled” to through VA loans. Not all VA members use 100% their entitlement when they purchase a home. If you still have entitlement left over, you can take out a second VA loan at the same time after completing your application process again. If you’re planning on using more than one VA loan at a time, it’s important to keep occupancy requirements in mind. Be sure to speak with a Loan Originator that has familiar experience with this type of situation.
Qualified Veterans with their full VA loan entitlement can borrow as much as a lender is willing to extend. The VA loan limits only affect borrowers with less than their full entitlement.
VA loans have had the lowest average fixed interest rate on the market for more than five years in a row, according to data from Ellie Mae. VA loan rates are set by private lenders.
The VA loan provides a number of one-of-a-kind benefits for active-duty members, Veterans, and surviving spouses. To learn more about our VA loan program, contact us today. You’ll be put in touch with a Loan Originator who will walk you through each unique part of the process and ensure your mortgage success.
Homestead Funding offers exceptional customer service and a convenient mortgage process. Whatever your financing needs, our goal is to exceed your expectations.