If you are a veteran, there is a good chance that you have earned the benefit of a Veterans Administration loan. These loans can be a good deal for a veteran looking to buy a house, but there are a few things you should know about them.
Not every veteran will qualify
You need to check with the Veteran's Administration to determine your eligibility. Although most veterans qualify, there are certain minimum times that you will need to have served. This will depend upon the years you served and the branch of service. There are exceptions to this that relate to injuries suffered while in service. An example of someone who does not qualify would be anyone given a dishonorable discharge; any other discharge status will make you eligible.
You don't need great credit
Because these loans are backed by the government, there is little chance a lender will lose their money if a borrower defaults on the loan. For this reason, the credit scores that a lender looks at to approve a VA loan are generally lower than a regular home mortgage. But because they do not want to go through the process of recovering their loan money, each lender will have a minimum standard for a credit score. Whereas most lenders will be looking for good or better credit, a lender offering VA loans may only require a fair credit score.
You may need only a small down payment
Keep in mind that these loans are only offered by approved lenders in the private sector. For this reason, it is their loan requirements that you are interested in. Along with lower credit scores to qualify, you may need less of a down payment or none at all. Except for expensive homes, there is no requirement by the VA for minimum down payments. Some lenders may require only a small percentage of the loan as the down payment. This is attractive to a borrower, but you need to make sure you can afford the monthly payments.
The process for closing is a little different
Although the process is basically the same as with other mortgages, there are a few additional steps that need to be taken. For example, someone from the VA will need to see the house to make an appraisal, but the additional inspection and paperwork add very little to the total time to close on a home.
If you want to buy a house but don't think you can afford one, you may be surprised to find out that you can buy one with a VA loan. If you are eligible for this benefit, it is worth exploring because a VA loan is among the best deals for a mortgage that you will find.
For more information on VA mortgage loans, contact a lender near you.
Share29 October 2019
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