When you’re trying to get a mortgage, there are all kinds of special programs that can help you get into your dream home with lower interest rates, higher acceptance rates, and reduced down payment requirements. If you’ve ever been in the armed forces, you should check out Veterans Administration home loans. Here are more details on this option and its benefits.
What is a VA Home Loan?
Veterans Administration home loans are available to military personnel and qualified veterans. The borrower will need to provide a DD Form 214 and a Certificate of Eligibility. A VA home loan has several purchase and refinance options for owner occupied homes. You can obtain Veterans Administration home loans from a variety of mortgage lenders, and they are guaranteed by the U.S. Department of Veterans Affairs.
If you default on a VA loan, the bank doesn’t have to deal with the loss. Instead, the VA steps in to help. That set-up minimizes the risk for the bank, and as a result, the bank can grant these loans more easily with no down payment.
What are the Benefits of Veterans Administration Home Loans?
The advantages of a VA home loan include the following:
- Higher loan limits than FHA mortgages
- Often lower closing costs
- Low or no down payment
- No mortgage insurance required
FAQ’s about Veterans Administration Home Loans?
To help you decide if a Veterans Administration mortgage is right for you, here is a look at some FAQs about these types of mortgages:
- What is the borrowing limit? — As of 2018, there is no borrowing limit on VA loans. You can borrow as much as the bank will extend to you, but the VA will only guarantee up to $453,100 in most areas — note the limits may be lower in some places.
- What types of properties qualify for a Veterans Administration mortgage? — You can use VA loans on single-family homes and up to four-family apartment complexes, but the mortgage holder must live on site.
- Can you use a VA loan to buy a rental property? — You can’t use a VA loan to buy a rental property unless you plan to reside there. For instance, if you qualify, you can use a VA loan to buy a fourplex. Then, you can live in one unit and rent out the other three.
- Can you run a business from a home purchased with a VA loan? — The VA may also have requirements related to how you use the space — for instance, if the property is residential and commercial, at least 75% of the space needs to be used for residential purposes.
If you are currently in the U.S. military, a veteran, or a surviving spouse of a military veteran, call Capital Mortgage Advisors today and see if you qualify for a VA home loan. It is our honor to provide VA home loans to those that served in the U.S. military forces!
Still curious? Everything you need to know about a VA home loan.