VA loans are flexible, no-down-payment mortgages that have helped over 24 million military veterans move into their first homes since 1944.
However, many VA loan applicants do not grasp the program’s unique perks and advantages, leading to costly mistakes and missed opportunities. My Lending Pal has compiled some of the most crucial must-knows on VA home loans so you can make an informed decision. Read on!
VA Loans are Exclusively for Primary Residences
VA loans are structured primarily for residential properties, which means lenders won’t approve your loan if you plan to use the money to invest in a rental property or vacation home.
Although VA loans are only available for primary residences, you can utilize this advantage to purchase a duplex or other multi-unit property as long as you live in one of the units.
You Can Apply Again and Again
Some veterans may not apply for VA loans because they believe they can only have one and that once they use it, they can no longer apply for one. As a result, they either “store” that benefit for when they discover their ideal house (or, at the very least, a home in which they can picture themselves retiring), or they don’t even contemplate asking for another VA Loan when they need to relocate.
However, VA Loan privileges can be utilized repeatedly, whether you buy two or ten properties in your lifetime. You should have no trouble obtaining another VA Loan as long as you pay off the loan each time and no longer own the property the house was built on.
VA Loans are Assumable
Your VA lender can allow a buyer to come in and assume your debt, which is especially useful if interest rates climb. The financing conditions might be far more beneficial to the buyer, and the transaction fee could be significantly lower. There are liability and VA loan entitlement concerns to be aware of, so consult with your lender about the implications.
There’s More Than One VA Loan to Choose From
There are VA loan programs to choose from, ranging from buying, refinancing, and home building choices to financing prefabricated homes.
The VA also provides a simplified refinance product (also known as IRRRL or Interest Rate Reduction Refinance Loan) that allows a quick refinance from one VA loan to another, reducing monthly payments. Furthermore, some lenders do not demand an appraisal, income, or credit check under this “IRRRL” scheme.
You Can Request for Lower Interest Rates if You Pay On Time
A Streamline Refinance is a unique feature available with FHA and VA loans that eliminates all paperwork, costs, and verifications associated with a typical refinance.
If interest rates have fallen and you have made all of your VA loan payments on time for at least 12 months, you can cut your rate without an appraisal, with very little paperwork, and at a much lower cost.
No Prepayment Penalty
You may make extra payments whenever you choose, saving you thousands of dollars in interest over the life of your loan. You may also set up your payments to automatically deduct a bit of the amount each month. Just $100 more per month may cut years and tens of thousands of dollars off the debt.
Surviving Spouses Can Qualify
In 2015, almost 3,000 surviving spouses used their deceased partner’s VA benefit to purchase a property. Unmarried spouses and wives of Service Members killed in action can purchase a house with no down payment and no mortgage insurance. In addition, the VA financing fee is waived.
There is no way to thank a slain hero’s spouse, but this benefit hopefully helps them move on after tragedy.
VA loans are an excellent financing option for military veterans, offering zero-down payment and various perks. Applicants or their spouses must exercise due diligence in scoping out what else this unique loan has to offer. The best way to do this is to partner with a reliable mortgage brokerage.
If you will need home loans to help you buy your first home, come to MyLendingPal! We are a Florida and Georgia mortgage brokerage specializing in conventional, FHA, first-time home buyers, and VA home loans. Interested parties may call 833-379-0797.