A VA loan is a mortgage loan insured by the U.S. Department of Veteran Affairs (VA) that is available to most US service members. It offers some great benefits to those that have served our country.
Benefits of VA Loans
- You can buy a home with no money down.
- You can refinance up to 90% of the value of your home.
- No Monthly Private Mortgage Insurance (PMI).
- Sellers can pay most of your closing costs.
- VA loans are usually easier to be approved for, because the Government insures the loan so there’s less risk to the lender.
- If you already have a VA Loan you might be eligible for a VA Streamline Refinance.
- Disabled Veterans may qualify for a waiver of the Funding Fee, if they receive any disability payments from the VA or if they are considered to be at least 10% disabled.
Who is eligible for a VA Loan?
As a rule of thumb, almost all active duty or honorably discharged service members are eligible for a VA loan. Call us to check on your Certificate of Eligibility.
You may be eligible for a VA loan if any one of these statements describes you:
- I served 181 days during peacetime. (Active Duty)
- I served 90 days during wartime. (Active Duty)
- I served 6 years in the Reserves or National Guard.
- I am the spouse of a service member who was killed in the line of duty.
- I currently receive disability payments from the VA.
What is the VA Funding Fee and is it required?
Yes, it is required. It is a fee paid directly to the Department of Veteran’s Affairs, so they can insure your loan, which provides you with the opportunity to receive a loan without a down payment.
How much is the VA Funding Fee?
It depends on several factors including: Whether you are Active Duty, Retired, Guard or Reserve and whether this is a first time use, subsequent use, or a cash-out refinance, as well as how much of a down payment you are putting into the transaction. The fee can range from as little as .50% up to 3.6% of the loan. Generally, the more money you put down the lower the VA funding fee. Please contact us and we will help you determine what the exact cost of the VA Funding Fee would be for your particular situation.
Do I have to pay the VA Funding Fee out of pocket?
No, you can include the VA Funding Fee in your loan and pay the funding fee over the course of your loan. The seller can also pay this fee.
Do I still have to pay other normal closing costs like Appraisal, Title and Escrows?
Yes, however with a VA loan, if you are purchasing a home the seller can pay for all or part of your closing costs.
What is a VA Streamline Refinance? (IRRRL)
A VA Streamline Refinance is a refinance option that is available, if you already have a VA mortgage and you want to lower your interest rate with little or no out-of-pocket closing costs. You don’t have to provide bank statements, W2s, job verification or paystubs. Also, NO appraisal is required.