VA Mortgages
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Many veterans want to take advantage of the valuable benefits that they have earned entitlement to through their time of service to the military. One of the most widely used benefits for veterans is the VA Home Loan Guarantee Program. Through this program veterans can get a home loan that is guaranteed by the VA through a VA approved lender. Because of the guarantee by the VA it is easier for the veteran to get a home loan with great terms and no down payment.
New Information on the VA home Loan Guarantee Program
Even though veterans have been using the VA Home Loan Guarantee Program for over 70 years, there are still some new veterans who are not yet familiar with the program benefits and how it works. Some of the important facts a veteran should know about the VA Home Loan Guarantee Program are:
- The VA does not loan you the money to purchase a home directly. Instead the VA gives veterans a list of VA approved lenders that are qualified to service VA home loans and the lender offers veterans a mortgage loan if they qualify. Once the mortgage loan for a veteran is approved the VA then guarantees a portion of the loan amount to the lender. In the case the borrower defaults on the loan the lender can recapture some of the loan amount from the VA guarantee. As a result of the lender being guaranteed a portion of the loan no matter what the borrower does, it makes it easier for veterans to get a mortgage loan with better terms and lower fees than a traditional lender.
- Veterans who take part in the entitlement in the VA Home Loan Guarantee Program are not required to go through Pre-Purchase Counseling. Pre-purchase counseling will help the borrower better understand the process of purchasing a home and is strongly recommended by the VA even though it is not required as of yet.
- You are not automatically entitled to the benefits of the VA Home Loan Guarantee Program. There are specific service requirements that the VA has for veterans in order to earn entitlement to this particular benefit. To see if you are eligible for the program depending on the service requirements of the VA go to http://www.homeloans.va.gov/elig2.htm
- Veterans do not automatically get a loan because they are eligible for the VA Home Loan Guarantee Program. In order to get a loan you must meet the eligibility requirements of the VA approved lender just like any other lender. They need to approve your loan depending on their specific loan eligibility requirements. You must have satisfactory credit and have steady employment. If you have had a bankruptcy in the past you may still be eligible for a VA loan depending on when the bankruptcy occurred and when it was discharged.
- The amount of entitlement depends on the cost of the home. Basic entitlement for veterans is $36,000 for home loans up to $144,000. A home can be purchased for more than this value and the VA will guarantee 25% of the home loan for all loans up to $417,000.
- Even though the VA will only guarantee 25% of a loan up to $417,000 there is no loan limit. A veteran can get a loan for whatever amount the lender will grant, the remaining balance of the home will not be guaranteed by the VA.
- In order to prove your eligibility in the VA Home Loan Guarantee Program you must get a Certificate of Eligibility. A Certificate of Eligibility can be obtained by your VA approved lender on the internet through the ACE, Automated Certificate of Eligibility, System, or you can go here and then print and fill out the form yourself.
Once you have submitted your Certificate of Eligibility and all of your loan paperwork to your VA approved lender you will be told the amount of a home loan that you qualify for and then you can begin shopping for a home.
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