Are you wondering if a Veteran Home Loan is worth the effort?
Twin Cities Lending wants to say thank you to our veterans, active-duty servicemen/women, and their surviving spouses by helping you find the tools to save money when buying or refinancing your home.
We want to make relocating to the Twin Cities a profitable venture, and help you settle into the community. We want you to stay, so we hope can be a resource to keep you around. You might have been born here locally. Even so, we want to make sure you know options to save money on your home loan as an active-duty or veteran service member.
What is a VA Home Loan?
A Veteran Home Loan is a loan package only available to qualified servicemen/women, Veterans, and their surviving spouses. The loan doesn’t originate from the government. Veteran Affairs administers the guidelines while qualifying lenders provide the financing. If the mortgage loan meets the VA guidelines, then a loan guarantee is completed to encourage lender participation. Even if the mortgage has defaulted, the federal guarantee is essentially a warranty to the bank that they will get their money back.
VA mortgages are more accommodating to lower credit thresholds than the average home loan, and no down payments are required because of the government guarantee. The VA guarantee enables lenders to offer mortgages with less rigid guidelines. They have a long list of benefits standard mortgages do not include. They are created to be affordable, so you end up getting more real estate for your dollar.
VA Home Loan Benefits
Veterans have a way to purchase a home through va home loan benefits that they wouldn’t qualify for through standard loan methods. Even those who are easily eligible for a mortgage can save on out of pocket expenses and the overall home purchase cost.
1. No Down Payment
Hard to believe, but no down payment is required to buy your house. There are some cases where down pay payment would be helpful. In general, they aren’t necessary.
2. Below Market Interest Rates
Lower interest rates will reduce your monthly mortgage payment. VA home loans interest rates are 0.5 to 1 percent below the conventional market interest rate.
3. Lower Credit Thresholds to Qualify
There is no minimum credit score you must have to qualify for a VA loan, but should have satisfactory credit. The lender will need to see that you have consistent income to fulfill your loan payments by checking your debt-to-income ratio and your credit report. Private lenders might have additional requirements.
4. VA Guarantee
What does that mean for you? That means you don’t need mortgage insurance. Because the government is guaranteeing the loan, you aren’t required to use a private insurer. The VA Guarantee will cost you nothing.
5. You Can Reuse The Benefit
Have you already received a VA home loan? Not a problem. The benefits aren’t a “one time type and you’re out” program.
6. VA Home Loan Are Assumable
The buyer must qualify themselves to be able to assume the loan. The buyer is qualified for VA loan benefits. An assumable loan will give you an advantage in the real estate market. It simplifies the process for another Veteran.
7. You Do Not Have To Be a First Time Home Buyer
Yep, you don’t have to be a first time home buyer. In fact, if you are a first time home buyer, you might qualify for additional programs that will help reduce your principle in addition to a VA home loan. If you are a first time home buyer, research to see what your options are along with their requirements, before you start shopping for your house. Here is a list of HUD-approved counseling agencies in Minnesota.
8. No Fees For Paying Off Mortgage Early
For the standard home loan, if you pay your home mortgage off early, there is a penalty fee. That is how banks make their money, with a long loan life or penalizing you for early payoff. Do you feel like paying off your mortgage early? With a VA home loan, you can go for it, and knock out your mortgage before it’s due.
9. VA Could Be of Some Assistance if There is a Hardship
The point of these loans is for you to have quality housing. The VA has guaranteed the loan, so they want to be sure you are getting the benefit. Keeping your house is of great importance. There is help if you need it.
10. Decreased Closing Costs
VA rules limit how much closing can cost you. For once, hooray for government regulations. You will pay less than with a standard home loan.
Who is Eligible For a VA Home Loan?
- National Guard members and Reservists who meet the requirements of basic service
- Active-duty service members
- Veterans with a service-connected disability could be eligible
- Spouses of military members that died while on active duty
Also, veterans who meet at least one or more of the following:
- Served more than six years of service in the National Guard or Reserves
- Served 90 consecutive days of active service during wartime
- Spouse of a service member who has died as a result of service-related disability or who have passed away in the line of duty
- Served 181 days of active service during peacetime
Dishonorable discharged veterans WILL NOT qualify.
VA Home Loan Calculator
The va home loan calculator is a handy tool, and it provides you with a roughly estimated mortgage payment. Use it to compare how much you will save with a VA home loan vs. a standard loan.
At Twin Cities Lending we can help you utilize your VA home loan benefits on your next home purchase. We know the ins and outs of refinancing and would love to answer any questions you have about using your veteran home loan benefits. We are thankful for our servicemen/women and all they do for our country. Contact us so we can help.