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VA Loans for Military Veterans
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VALoans.com Staff Writer - Securing a home loan can be a difficult and frustrating venture. But if you're a Military Veteran, it doesn't have to be. The VA Loan Program can make it much easier for Veterans to secure a home loan by eliminating the need for a down payment. Also, with careful structuring of the purchase contract, the Veteran can avoid needing cash for closing costs as well.
Add companies like VALoans.com to the mix, and you've got a process that Air Force officer Kimberly Gray said was about as easy as they come.
"I basically did nothing," Gray said. "It was a matter of sending them the paperwork and they filed everything for me. It was really easy."
Companies like VALoans.com have changed the way Veterans can obtain a VA Home Loan. However, the main benefits of VA Loans are about the same as they have always been. A VA Home Loan does not require a pricey down payment or closing costs if the contract is properly structured. The program also is not credit score driven.
Those main facets of the VA Home Loan program have been in place since the program was introduced in 1944 as part of the original G.I. Bill of Rights, and the most recent updates have only made things better.
Recent legislation has increased the maximum loan amount to $417,000 - well above the national average home value of $190,000. But the most common thing that Veterans spoke of when asked about their VA Home Loan was just how easy it was to obtain.
"The process was very satisfying," Frank Montressor, a United States Marine, said. "Once you have the forms you don't have to do anything else." That's because companies like VALoans.com have on-staff VA underwriters - people who know the ins and outs of the VA Loan Program -- and specialize in obtaining a loan for Veterans of the United States Military.
They can tell you if you will qualify, and secure approval up to two months faster than other methods. Most loans can be closed within two -three weeks of receipt of a purchase contract.
The VA has its quirks, just like any other type of home loan, but those quirks don't have to be your problem. Neither does a down payment.
A VA Loan doesn't require one. That, in itself, can be a huge boost to morale. Veterans coming home from overseas can use that money for a variety of other things, instead of forking it over just to secure a home loan.
"Generally, the major benefit is the no down payment feature," Katherine Faliski with the Department of Veterans' Affairs, the department that guarantees VA Loans, said. "However, VA offers other advantages not found in many loans products. There is no requirement for Private Mortgage Insurance. VA Loans do require a one-time payment of a funding fee but that is included in the loan. Under the VA Loan program, veterans can also be assured of getting assistance should they have difficulty making their payments."
Consider this: In 2006, a person looking for a $125,000 loan to buy a house in Texas would have to make a $2,812 down payment with a 30-year FHA First Time Homebuyer Fixed Rate Loan, or a $3,750 down payment with a 30-year 97 percent Loan-to-Value Conventional Fixed Rate Loan.
A homebuyer that uses a VA Home Loan would pay exactly zero. The other financial consideration that Veterans unanimously mentioned was no closing costs with a properly structured contract. Those same two loans mentioned above would require more than $5,000 each in closing costs. That brings the grand total needed at closing with either an FHA or Conventional Fixed Rate Loan to at least $8,500. With a VA Loan, that number is still zero.
"I never really thought about any other way to go about it," Gray said. "The zero down payment and the assistance that VALOANS.COM provided in the structuring of my contract so there were no closing costs definitely made it the most attractive option."
Gray said that just about every other serviceman and woman she knows is already aware of the VA Home Loan Program. So what does it take to get one? The requirements to obtain a VA Home Loan are simple. Veterans that have served 90 days of active duty during wartime or 181 continuous days during peacetime are eligible, as long as they obtained any discharge other than dishonorable.
The program also extends to National Guard members and reservists. Members of those two groups are eligible after six years of service, with a few stipulations involving eligibility of surviving spouses.
What about money? Well, the VA Loan Program is not credit score driven. If a potential borrower has made timely payments in the last 12 months, they can get a loan, regardless of past credit history. The most important monetary consideration of a VA Home Loan is the debt-to-income ratio, a place where VALoans.com can help as well.
The debt-to-income ratio is the relationship between the borrower's income and their monthly bills. VALoans.com loan specialists can help you find this. The largest chunk of this ratio will generally be the monthly payment a borrower makes on their home. The place VALoans.com can help here is in finding out what will be affordable for each individual, and at what loan amounts they can be approved.
It's just one of the many ways these companies team up with the VA Home Loan Program to make things easier for Military Veterans. Everyone knows that getting a home loan can be a headache, but if you're a Veteran, you can use VALoans.com. You'll get the same benefits, and let someone else handle the headache."I don't really know anyone who has gone any other way," Gray said.
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