Everything You Need to Know About VA Loans

Everything You Need to Know About VA Loans

You've served your country and now you're ready to purchase a home. So, you may be wondering what financing options are available to you. Fortunately, your service to your country has earned you the benefits of being able to get home financing that is backed by the U.S. Department of Veterans Affairs. Since 1944, the VA has been proudly offering a lending program that makes it possible for you to get a home loan with zero money down, easy financing requirements, and competitive interest rates. 

What Is a VA Loan?

A VA loan is a home loan option that is available to veterans, service members, and some military spouses. Although these loans are issued by private lenders, they are guaranteed by the U.S. Department of Veterans Affairs. In addition to allowing current and former military members to purchase a home under the program, they also offer mortgage refinancing options for those who qualify.

What Are the Requirements for a VA Loan?
Military service is a primary requirement for VA loan eligibility. However, certain conditions have to be met in order to qualify. You may be eligible for a military VA loan if one or more of the following criteria applies to you:
  • You served 181 days consecutively on active duty during peacetime
  • You served 90 days consecutively on active duty during wartime
  • You served at least six years in the Reserves or National Guard
  • Your spouse was a veteran who died in the line of duty 
  • Your spouse died of a disability connected to their military service
What Supporting Documents Do I Need?
When you're applying for any type of VA loan, there are a few documents you must be able to provide before your application can be approved. These may include:
  • Certificate of Eligibility Request, Form 28-1880
  • Certificate of Eligibility
  • Form DD-214
Additional documents you may need to verify credit, income, and identity include:
  • Most recent full month of paycheck stubs
  • Most recent 2 years of W-2's
  • Government issued ID
  • Homeowner's insurance policy
What Are the Benefits of a VA Loan?
Obtaining a VA loan is more than simply an opportunity to become a homeowner. When you choose this option, you may experience a variety of additional benefits that include:
  • 100% financing
  • 100% cash-out refinance
  • No mortgage insurance
  • Competitive interest rates
  • Flexible qualification requirements
  • May qualify for a first-time home buyer grant of $2,500
  • May qualify for a VA grant in the amount of $5,000
What Can Hinder Loan Approval?
Since military service is a key component to VA loan approval, your reason for discharge can have a significant impact on your eligibility. A dishonorable discharge automatically disqualifies you to participate in the VA Loan Guaranty Program. However, there are a couple of other discharge statuses that could impact your ability to qualify for a VA home loan.
Typically, veterans who served at least 90 days consecutively are eligible. But, if you were discharged for any of the following reasons, your application may require further review:
  • Other Than Honorable
  • Bad Conduct
  • Dishonorable Discharge (automatically disqualifies you from loan approval)
What Should I Expect at Closing?
On your closing date, you will complete all the final paperwork required to take possession of your new home. You may also be required to provide some additional documents that include:
  • Title insurance policy
  • Identification
  • Homeowner's insurance policy
  • Closing funds in the form of a cashier's check or electronic wire, if applicable

You've served your country and now it's time to reap the benefits of your hard work and dedication. If you're ready to take the first step toward homeownership, we're here to help. Simply fill out this contact form and one of our experienced mortgage lenders will be in touch!

Even if you don't qualify for a VA loan, we have many other financing options that may be right for you. Contact us today!

Lincoln Savings Bank, Member FDIC
Equal Housing Lender