Since this is the week we celebrate Independence Day, I thought it was a good week to remind everyone that VA loans are a great idea for those that can qualify for them! I read an article earlier this week that showed the number of VA loans was down drastically until 2013, in 2013 those numbers jumped signficantly. Part of the reason would be the changes to FHA mortgage insurance, but it also sounded like lenders were offering VA mortgages more often. I know in the past, there were several times I talked to clients about using VA loans and they weren't aware that they were eligible for the program.
VA mortgages are one of two mortgages left that you can use with no money down. The other is USDA rural development loans. VA mortgages do have a funding fee that you can roll into the mortgage and they do not have a monthly fee which helps lower your monthly payment compared to FHA loans. The VA funding fee will vary based on the number of times you have used your VA eligibility. If you have any VA related disability, the VA funding fee may be reduced or even eliminated.
VA mortgages are available to those that have served on active duty for at least 181 days during peacetime or 90 days during war time. If you have 6 years in the reserves or national guard, you should be eligible. The other possibility is a spouse of a service member that was killed in the line of duty. Your lender will get your DD 214 and request a certificate of eligibility if you do not already have one.
VA rates are very similar to FHA rates, so typically lower than conventional interest rates. Since the VA funding fee is rolled into the mortgage and there isn't a monthly fee, the monthly payment is less than FHA.
If you have served our country – thank you! If you are thinking about buying a home and have VA eligibility, please talk to your lender about your options, it can be a great way to buy a home!