A VA loan is meant to help veterans of the United States Military get easy access to home financing. You will want to speak with a mortgage professional for the details, however, you should be able to qualify for a VA loan if you meet one of the following conditions:
- You have served 181 days of active service during peacetime.
- You have more than 6 years of service in the National Guard or Reserves.
- You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
The VA loan VS. the many other loan programs
With a typical conventional loan, you will generally be required to have at least 5% (3.5% for FHA) equity in order to qualify for, and close the loan. This is not the case with the VA loan. The VA mortgage loan may allow 100% financing. This way you can save any cash you have, or put it to work for you in other ways.
- This 100% financing works for cash out refinancing as well as a rate reduction or purchase!
With the typical conventional loan, you will generally have mortgage insurance if you have less than 20% equity in the home (mortgage insurance would always be required for an FHA loan). However, with the VA loan you will never have mortgage insurance, this may save you and your family hundreds of dollars per month.
The only down side to the VA loan is the associated funding fee (goes to fund the VA). However, because you will usually get a lower interest rate with the VA loan as opposed to a conventional loan, it makes sense in the long run.
- The VA offers the IRRRL (Interest Rate Reduction Refinance Loan) for existing VA borrowers. This program will allow for a reduction of the interest rate with a severely reduced funding fee, no appraisal, and faster processing times.
You may be eligible to have your VA funding fee waived by the VA entirely!
Speak with a mortgage professional today to find out what option makes the most sense for you and your family.