VA Loans

The VA helps current servicemen, veterans, and some surviving spouses obtain favorable financing terms through guaranteeing a portion of the loan.

Who is eligible to obtain a VA loan?

• Veterans
• Active Duty Personnel
• Reservists & National Guard Members
• Some Surviving Spouses

*The following information is taken directly from the U.S. Department of Veterans Affairs website, which can be accessed via the link provided at the bottom of the page for further reading and more detailed information.

Purchase & Cash-Out Refinance Home Loans

With a purchase loan, the VA can help you purchase a home at a competitive interest rate even though you may have found it difficult to find other financing. The VA’s Cash-Out Refinance Loan is for borrowers who want to take cash out of their home equity in order to take care of concerns such as paying off debt, educational costs, or making home improvements. A refinance loan can also be used to refinance a non-VA loan into a VA loan. Additionally, the VA will guaranty loans up to 100% of the value of your home.

About the VA Home Loan Guaranty

Most VA loans are handled entirely by private lenders and the VA rarely gets involved in the loan underwriting and approval process. The VA “stands behind” the loan by guaranteeing a portion of it, which gives the homeowner a decided advantage. In the unlikely event that you can’t make your mortgage payments, the lending institution can look to the VA to cover any losses they might incur. The VA loan guaranty is the “insurance” provided the lender.

VA Home Loan Advantages

The guarantee VA provides to lenders allows us to provide you with more favorable terms, including:

• No down payment is required as long as the sales price doesn’t exceed the appraised value.
• No private mortgage insurance premium requirement.
• VA rules limit the amount you can be charged for closing costs.
• Closing costs may be paid by the seller.
• The lender can’t charge you a prepayment penalty on the loan in the event of early payoff.
• The VA may be able to provide you some assistance if you run into difficulty making payments.

You should also know that:

• You do not have to be a first-time homebuyer.
• You can reuse the benefit.
• VA-backed loans are assumable, as long as the person assuming the loan qualifies.

http://www.benefits.va.gov/homeloans/index.asp