The VA home loan program is an incredible benefit for our nation’s veterans and active-duty military personnel. Have questions about this unique financing option? We have answers!
Who qualifies for VA mortgages?
The program is designed for veterans, active duty service members, reservists and members of the National Guard. Visit the Veterans Affairs website to see the qualifying criteria, including length of service, for each group. Surviving spouses may also qualify.
What can I use my VA benefit for?
VA home loan programs can help you buy, build, repair/renovate or refinance a home.
How much of a down payment will I need?
There is no set down payment requirement with the VA home loan program. In fact, nearly 90% of all VA home loans are made without a down payment. (*Closing costs and fees may still apply.) The VA home loan program — designed for veterans and active-duty military personnel — also has lenient eligibility requirements and competitive interest rates.
Will I have to pay PMI?
Not if you qualify for the VA home loan program. PMI —private mortgage insurance — is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Studies show that generally, the lower the down payment a homebuyer makes, the greater the risk of default. That’s why typically, PMI is required with many loan programs if your down payment is less than 20 percent of the value of the home you are purchasing or refinancing. The cost of PMI is customarily added to your monthly mortgage payment. However, another incredible aspect of the VA home loan program is the fact that there’s no PMI! Without this expense, you may enjoy lower monthly mortgage payments. Coupled with affordable interest rates, VA Loans can save you thousands of dollars over the term of your loan.
What about closing costs?
Closing costs include costs related to providing and finalizing your mortgage and home purchase. Even if you don’t have a down payment, you’ll have to pay at least some of the closing costs associated with your loan. If you’re using a VA home loan to buy, build, improve, or repair a home or refinance, you’ll need to pay at closing a VA funding fee unless you meet certain requirements. The funding fee is a one-time payment that must be paid on any VA home loan, with some exceptions. You will receive a Good Faith Estimate of your closing costs in advance of your closing date for your review.