One of the easily forgotten benefits from serving our country is the VA Home Loan benefit. No matter where you look, whether it be commuting to work or watching tv, we are constantly bombarded with financial institutions offering their services to purchase a home making us feel like our options are limitless. While there is some truth there, using your VA Home Loan benefit gives the Veteran a sense of confidence and protection.
For those new to the home buying process, I want to give a definition for some real estate related words you will see throughout this post.
- Mortgage – the loan used to purchase real estate. It serves as the agreement between the person purchasing real estate and the financial institution loaning the purchaser money. Information found in a mortgage is typically the loan amount, interest rate, length of the loan (i.e. 30 year fixed), and monthly payment amounts among many other things. Once the mortgage is paid off, the purchaser own’s the real estate and the mortgage goes away.
- Refinance – the piece of real estate must already have a mortgage on it and the person with the mortgage typically wants to lower their interest rate or pull equity (money) out of their house to be utilized for another purpose.
- Interest Rate – money paid to the financial institution that loaned the real estate purchaser money for real estate. This is like the ‘fee’ financial institutions charge the real estate purchaser for loaning them money. Real estate purchasers utilizing a mortgage must pay back the original amount of the loan plus the incurred interest. The interest rate can be either fixed or variable and should be clearly defined within the mortgage.
Who is Eligible for a VA Home Loan?
There are many factors that go into determining eligibility. However, over 95% of Veterans will fall into a couple categories. Currently serving active duty personnel and Veterans who have left the service are eligible if they served at least 90 days during wartime or 181 days of continuous service during peace time. A complete list of eligibility requirements can be found here on page 7. If still unsure of eligibility, you can simply fill out your form to get approved and your VA Home Loan rates.
What’s the Benefit of a VA Home Loan?
With the numerous options available to purchase or refinance a house, you should understand why the VA Home Loan benefit is so valuable.
- 0% down payment. Allows you to use your hard-earned money on other things important to you.
- Guaranteed low, competitive interest rates. Often less than other financial institutions.
- No negotiating or haggling with your lender since the interest rate is published and fixed.
- No Private Mortgage Insurance (PMI). This saves you $100’s each month.
- Caps on how much you can be charged for ‘closing costs’. This can save you $1,000’s.
- Home inspection conducted by VA personnel to ensure home is safe, sanitary, & sound.
- Loan is assumable when you move. If interest rates rise, you will be more competitive when you decide to sell.
What is the Maximum Amount of Financing for a VA Home Loan?
The VA determines the maximum Home Loan amount by county across the country. The maximum amount in most counties across the US in 2018 is $453,100. In those counties where the cost of living is substantially more the VA takes this into consideration. For example, the 2018 VA Home Loan maximum in Honolulu, Hawaii is $721,050. A complete list of the 2018 VA Home Loan maximum amount can be found here.
How do I find out more Information regarding a VA Home Loan?
To find out more information and have someone answer any questions you may have regarding a VA Home Loan Purchase or Refinance, take a minute to fill out your contact information here.
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