What is a VA-guaranteed Loan?
These loans are made by a lender, such as a mortgage company, savings and loan or bank. VA's guaranty on the loan protects the lender against loss if the payments are not made, and is intended to encourage lenders to offer veterans loans with more favorable terms. The amount of guaranty on the loan depends on the loan amount and whether the veteran used some entitlement previously. With the current maximum guaranty, a veteran who hasn't previously used the benefit may be able to obtain a VA loan up to $203,000 depending on the borrower's income level and the appraised value of the property. The local VA office can provide more details on guaranty and entitlement amounts.
What Can a VA Loan be Used For?
If you are currently serving active duty or are a veteran of the Armed Services, you may qualify for a VA loan with some of the providers seen on mortgagevaloan.com .
7VA mortgages are guaranteed loans that are made by private lenders to eligible veterans for purchases of owner-occupied properties and for eligible mortgage refinance transactions.
Not only do VA loans provide some very flexible guidelines, they also are some of the most competitively priced products on the market.
Experienced house hunters know they’ll be required to pay certain fees and expenses which are typical of the home buying experience. Those expenses include paying for a VA assigned fee appraiser to look over the property an applicant wants to buy.
Unfortunately the appraisal is sometimes not a one-step process--the appraiser may find areas which need correction or repairs. These must be addressed to the satisfaction of the VA before the loan is closed or within a reasonable amount of time as described in VA regulations.
Those who serve in the Army, Navy, Air Force, or Marines are quite familiar with the phrase "mil-to-mil spouses" or "mil-to-mil couple."
For the uninitiated, the phrase, "mil-to-mil" refers to a married couple who are both members of the armed forces. For married couples looking for a VA home loan, when both are in the military, there are a variety of options when it comes to using VA insured loan benefits.
There are a lot of rules that regulate the real estate buying and selling process. Some are local ordinances, some are state law, and others are federal regulations. When it comes to buying a home with a VA mortgage, there are additional regulations.
Buying a home with a VA mortgage means having the property appraised to make sure the home lives up to physical standards set by the Department of Veterans Affairs. It also means insuring the sale is fair to the buyer, including the ability to freely transfer ownership as needed.
Buying a home for the first time is confusing—there are many terms to learn, a great deal of paperwork and many little details. Buying a home with a VA guaranteed home loan is definitely more buyer-friendly, but if you have never purchased a home before, there are a few additional terms and details you’ll need to learn about the VA.
One of the most common misconceptions lenders must dispel about VA mortgages is where the funds come from. Private banks issue the actual VA mortgage—no money comes from the VA itself. The Department of Veterans Affairs comes in on the veteran’s behalf with a loan guaranty, making the loan more secure for the lender. The VA promises to pay a specific amount of the VA mortgage should the veteran go into foreclosure.
1. How much is the guaranty?
VA will guarantee up to 50 percent of a home loan up to $45,000. For loans between $45,000 and $144,000, the minimum guaranty amount is $22,500, with a maximum guaranty, of up to 40 percent of the loan up to $36,000, subject to the amount of entitlement a veteran has available. For loans of more than $144,000 made for the purchase or construction of a home or to purchase a residential unit in a condominium or to refinance an existing VA guaranteed loan for interest rate reduction, the maximum guaranty is 25 percent up to $50,750. (See "Service Eligibility" section for information about entitlement).
You must be an eligible veteran who has available home loan entitlement (except in the case of an interest rate reduction refinancing loan - see Interest Rates(
The loan must be for an eligible purpose;
You must occupy or intend to occupy the property as your home within a reasonable period of time after closing the loan;
GUARANTEE THAT THE HOUSE YOU BUY, WHETHER IT IS NEW OR PREVIOUSLY OCCUPIED, WILL BE FREE OF DEFECTS. The VA appraisal is NOT intended to be and "inspection" of the property. If you have any doubts about the condition of the house, it is in your best interest to seek expert advice BEFORE you legally commit yourself in a purchase agreement. Most sellers will permit you, at your expense, to arrange for an inspection by a qualified residential inspection service and negotiate with you concerning repairs to be included in the purchase agreement. Such action can prevent later problems, disagreements and disappointments. Remember, VA guarantees only the loan, NOT the condition of the property. It is your responsibility to be an informed buyer and assure yourself that what you are buying is satisfactory to you in all respects.
VA loans offer the following important advantages over most conventional loans:
Ensure that all veterans are given an equal opportunity to buy homes with VA assistance, without regard to their race, color, religion, sex, handicap, familial status or national origin.
No down payment (unless required by the lender, the purchase price is more than the reasonable value of the property as determined by VA, or the loan is made with graduated payment feature (