Veterans who want to invest in their own real estate have the liberty of using a VA loan to achieve this goal. These types of mortgages typically have lower interest rates than other loan programs and are specifically designed to help veterans obtain owned housing. The type of real estate veterans can buy is pretty flexible. In fact, it’s a little more flexible than FHA loans. If you are a veteran looking to apply for a VA loan, this blog post will fill you in on everything you need to know.
VA Loan Basics: What You Need to Know About VA Loans
Before applying, here are some of the need-to-know basics veterans need to know.
Eligibility
Who is eligible for this loan? Generally, there are three types of veterans who can qualify for VA loans. They are:
1 – Veterans who served on active duty during a war, campaign, or expedition,
2 – Veterans who served at least 181 consecutive days during peacetime, and
3 – Members of the Reserves or National Guard who were called to active duty for more than 180 days.
What Are the Loan Requirements for a VA Loan?
There are a few basic things you’ll need to apply for a VA loan. For starters, you’ll need a Certificate of Eligibility (COE). The CAE is issued by the VA, and it verifies whether or not you were on active duty. Additionally, you’ll need to provide income and asset information. You’ll also need to put down a minimum of 3.5 percent of the purchase price of your home. This can be done with a down payment or in the form of a cash contribution by the seller.
VA Loan Interest Rates
They are typically lower. This is due to the VA’s competitive bidding program. The goal of the bidding program is to get the lowest interest rates for veterans. The VA does this by encouraging private lenders to compete for the business of veterans. The VA sets the minimum interest rate for these loans at 2 percent above the current market rate.
VA Loan Down Payment
Veterans can purchase a home with a down payment of less than 20 percent. This is a big advantage of the VA loan program. The VA will allow veterans to purchase a home with a down payment as low as three percent. However, the VA loan will only finance the loan if veterans come up with a down payment of at least three and a half percent. The VA will allow veterans to pay the down payment in the form of a cash contribution from the seller, too. The VA doesn’t require veterans to use the VA loan program’s down payment assistance to qualify for a loan. Veterans must come up with their own down payment and closing costs.
Conclusion
VA loans represent a great option for veterans in need of a mortgage. The loans are ideal if you want to purchase a home and don’t have a lot to spend on closing costs and down payments. The VA will fund your loan, but you’ll need to find a lender who participates in the VA’s program.
Veterans who want to learn more about VA loans in Dallas can come to Total Lending Concepts! We offer home loans to fit every situation — whether you are a first-time home buyer searching for your first home or ready to buy that dream home you’ve had your eye on. Total Lending Concepts offers a wide variety of loan options — conventional, VA, USDA, FHA, as well as other options to fit your needs. We can’t wait to show you what getting a “home loan with a little TLC” feels like!
