Homeownership is the desire of many, in fact, a survey by the National Association of Realtors found that 87% of respondents saw Homeownership as part of the American Dream. With stats like those, it comes as no surprise that this American dream – the dream our military has served to protect – is a desire of theirs as well. How much do you know about the VA Loan?
History of the VA Loan
The great thing is that they can! Thanks to President Roosevelt, who began the program as a part of the GI Bill in 1944. A little history lesson for you here: the first VA guaranteed loan had a hard cap of $2,000. These loans have transformed greatly in the last 74 years as the economy has transformed as well. Now the VA guarantee amount is $453,100, a huge jump from the original amount. Not only is this a huge change, but when the VA loan program began veterans were only granted the loan if they had applied within five years of the war’s end. Now there is no cutoff time for veterans to apply for this benefit. Great News for today’s veterans!
Benefits and Advantages
There is much to know before applying for a VA loan, things like the benefits and advantages for example. VA loans are now among one of the few loans that offer an option for 0 down payment. This comes as a huge advantage to first-time homebuyers, as coming up with 20% of the home value can prove to be quite a task. Another great advantage is the VA wishes to do well by all of the VA borrowers so the inspection process is thorough to ensure the safety of the buyer’s home. Another expense not to concern yourself with- banks do not require you to buy Private Mortgage Insurance, as VA Loans are government backed. Also important to consider- because the VA loan is backed by the U.S. Government, qualifying may be easier than through a conventional loan program.
How it Works
So, what else do you need to know? Well, how the process works might be a good start. You will start by applying, and if you do so through Benchmark, we will be happy to retrieve your Certificate of Eligibility for you. Check that off your to-do list! This is the beginning of the application process, and at this point, you should know if your service-time is enough to qualify. To be eligible you must either:
- have served 90 consecutive days of active service during wartime.
- have served 181 days of active service during peacetime.
- have more than 6 years of service in the National Guard or Reserves.
- be the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
Buying with a VA Loan
After the quick application process, you will receive a pre-qualification letter if you have met the requirements for eligibility. The process from here is very similar to other home loan options. You will begin to provide the lender with documents such as (but not limited to): Pay Stubs, Tax Returns, and W2s, Employment History, Bank/Investment Statements, as well as any others that may apply based on individual situations.
Next, if you haven’t already chosen one, you will choose a realtor to help you find the home of your dreams. You will work with your realtor to submit an offer within your budget, which will be outlined in the application process. The last part is processing and closing, which includes an appraisal. The VA requires homes to be move-in ready, and any problems with the property will generally have to be corrected by the seller prior to closing on the loan. Your paperwork will be reviewed by an underwriter to ensure that you are ready to take on the conditions of the loan, and that they meet the requirements of the VA. Finally, at closing, you will sign paperwork, finalize your VA Loan, and take ownership of your new home!
Here at Benchmark Mortgage, VA loans are our passion and we do everything we can to remove the stigma the goes along with them. Let us know if we can provide you with further information.
Ark-La-Tex Financial Services, LLC NMLS ID #2143 (www.nmlsconsumeraccess.org) is not a law firm, accounting firm, tax firm, or financial planning firm. This blog is for general information purposes only. Anyone relying on particular details contained herein does so at his or her own risk and should independently use and verify their applicability to a given situation. (https://benchmark.us)