A VA loan is a loan offered by Veteran’s Affairs. It is a program the government offers which allows active and former service members to finance a home. The program allows those who have served in the military to save money on a home loan.
Benefits of a VA Loan
A VA loan is mainly meant to save you money. There are also some instances where qualifying for a VA loan will save you money on home insurance and closing costs. There are also no down payment requirements, though a down payment will lower the amount financed and thus your monthly payments. When you have a VA loan, you also don’t have any mortgage insurance requirements. The flexibility of a VA loan means that you can save money from the beginning to the end of your mortgage.
Qualifying for a VA loan is not very hard. Whether the VA will approve the loan is up to them. However, having someone to guide you through the application process is helpful. There are minimum requirements from the VA and some that are additionally required from the lender. To qualify with the VA, you must have done one of the following:
- Served 90 days during wartime.
- Served 181 days of active service during peacetime.
- Have more than six years of active service with the National Guard or Reserves.
- Have a spouse who was a service member and either died from a service-related disability or in the line of duty.
While these are the qualifications for a VA loan, the lender themselves will also have a benchmark for credit history. While there are plenty who require a higher credit score, there are some who are willing to accept something a bit lower. It depends on the institution reviewing the loan application and the circumstances of the loan. Ultimately, you will not know until you talk to someone about the loan and what it will mean for you.
Entitlements and Why They Are Important
An entitlement is the VA’s contribution to your mortgage. Veterans who qualify are offered two types of entitlements. The basic entitlement is thirty-six thousand dollars or twenty-five percent of the mortgage. Lenders tend to approve around four times that amount, but you can use as much or as little of the entitlement as you like. There are also bonus entitlements you might be eligible for, called second-tier entitlements. Using the national conventional financing conforming loan limit, the VA establishes what the bonus entitlement amount will be. The limit is set by the Federal Housing Finance Agency and is used in correlation with the basic entitlement. The FHFA set the loan limit to $484,350 in 2019. However, some counties have higher limits, which is where the VA will still guarantee a quarter of the maximum; which is $726,535.
Whether you are able to use your entitlement more than once can depend on how much is left, county loan limits, and the amount of your mortgage. The VA tries to help veterans become homeowners, and they don’t discriminate by area. If you qualify for a VA loan and are looking at a high-end neighborhood, don’t let that deter you. There are options in place to help you, and TX Home Now will find them.
TX Home Now: Assisting with VA Loans
When you are considering a mortgage, you want to speak to an expert. You want to understand the terms you are agreeing to and know that you can adhere to them. Having an expert like TX Home Now in your corner can help you maximize the benefits you receive. Our specialists know all of the options available to you and understand them on a deeper level. Call and speak to a specialist now to get all the answers to your questions. At TX Home Now, we turn dreams of homeownership into reality!
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