Updated January 2018
The VA loan program is for active duty Servicemembers and Veterans across America. It allows Veterans to buy a home with 100% financing, 0% down payment, and 0% monthly mortgage insurance. Veterans who currently have a VA loan at a higher rate can take advantage of the VA streamline refinance (aka VA IRRRL) with zero out-of-pocket closing costs (they can be rolled into the loan).
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Most people are aware that VA doesn’t actually lend money (they work with approved lenders who lend the money). VA only insures your loan so that if you default, the lender gets paid. Because VA loans are backed by the government, lenders are excited to lend money to Veterans who qualify for the VA loan program.
VA Loan Highlights
Take a look at key points of the VA mortgage loan:
- 100% financing for new home purchases
- No mortgage insurance required
- VA loans have similar closing costs to other loans, even though they offer 100% financing
- A one-time funding fee is charged – but can be rolled into the loan
- No prepayment penalty in any VA loan
- VA loan can be used to purchase a home, build a new one, or improve its energy efficiency, e.g. insulation, solar heating/cooling systems, weather stripping and other energy improvements as approved by VA and the lender.
Certificate of Eligibility
A primary requirement in qualifying for a VA loan is a Certificate of Eligibility — a document showing your eligibility for a VA loan. If you have questions about getting your COE, the lender you are working with can usually help you get this document or answer questions related to it.
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VA Refinancing
If you are currently in a VA loan and are interested in getting a lower interest rate by refinancing, VA has made it easy for you. The VA streamline refinance program calls for reduced paperwork — no appraisal required and allows you to get a lower rate in the easiest possible way. The VA streamline program is also called the VA IRRRL program.
VA Loans and Down Payment Assistance
Is it possible to use a VA loan and still get down payment assistance? This is a question that you will want to ask your loan officer – but in general, you should be able to get a VA loan and still qualify for down payment assistance programs. Since VA loans offer 100% financing, many people don’t look more for down payment assistance programs – but they may still be available. It is always a good idea to know your options regarding DPA programs, tax credit programs, or other assistance that can help you buy a home.
VA Loans and Saving the Most Money
Whether you are buying a home or refinancing it, you can save money by shopping multiple VA-approved lenders. It’s a best-kept secret among lenders – they are encouraged to give you the best deal if they know you are shopping for loans. Lender comparison shopping is easy, free, and, a few minutes away from the best deal. Get a free VA loan quote today!
