Millions of US veterans are eligible for
VA mortgages, but many of
those who qualify are not even aware of this option. For those who
qualify a VA mortgage can save money and provide an easy way to get a
mortgage that may otherwise prove difficult to obtain. Current
interest rates and methods for obtaining a VA mortgage can be provided by
a mortgage broker.
Who Can Qualify for a VA Mortgage?
The qualification process for a VA Mortgage has several different
standards. Check with a mortgage broker or VA mortgage professional
to see if you qualify. The first step to getting a VA mortgage is to
fill out a Certificate of Eligibility. The basic qualifications for
obtaining a VA mortgage include:
- Active-duty veterans discharged during WWII and later periods,
without the status of "dishonorable".
- Active-duty veterans who served at least 90 consecutive days during
major conflict.
- Peacetime veterans and active duty personnel who have served more
than 180 days of consecutive service.
- Enlisted veterans whose service began after 1980 or officers whose
service began after 1981 who have served 2 years.
There are a few other stipulations to qualifying for a VA
mortgage. For instance, National Guard members and Selected Reserve
members may qualify, as well. If you have questions regarding your
eligibility, check with a qualified VA mortgage specialist.
How Can VA Mortgage Funds Be Used?
VA Mortgage funds can be used to purchase a house, condominium, or
townhouse. It may also be used to build a home or purchase a home
and make improvements. A VA Mortgage may also be used to refinance a
mortgage, as well as improving your home with energy-related features.
Why Choose a VA Mortgage?
A VA Mortgage is
preferred over a standard loan for many reasons.
Those who are eligible may not qualify for other loans. Depending
upon the lender, often no down payment is required. Interest rates
are another reason, not only do they tend to be lower but they are often
negotiable as well. There are no mortgage insurance premiums on
VA home loans, and they do not allow for an assumable mortgage. Closing
costs for purchasing a home can be lower than other forms of financing,
and prepaying your mortgage holds no penalty, as in some other forms of
loans. For those who qualify, VA assistance is available if
temporary financial difficulty occurs.
Is There a Cap on VA Mortgages?
The VA does not put a cap on how much money you can borrow. This
determination is up to the lender, typically a bank, savings and loans, or
mortgage companies. The basic entitlement of a VA mortgage is
$36,000, but some mortgages are eligible for $60,000 if they are over
$144,000. A lender will often loan up to 4 times the amount of the
basic entitlement without any requirement of a down payment.
Although there is no set maximum limit the VA allows you to borrow with
your entitlement, most lenders will not approve a total of over
$240,000. Lenders typically sell VA mortgages in a secondary market,
where the cap for the mortgage limit is $240,000.
Veterans who have already taken out a VA mortgage in the past may still
be eligible for remaining entitlement for any unused previous
balance. Because entitlement amounts have increased over time, this
means that many people who took out VA mortgages in the past may have more
money now than they were entitled to before. |
