There are currently 18.2 million veterans in the US and due to their selfless service to our country, there are many benefits designated for veterans. One of the highly popular benefits is a VA Home Loan which is designed to assist veterans with the home buying process. Purchasing a home is a large expense, and the down payment is often one of the biggest hurdles. If you are a veteran, it’s important to fully understand the benefits available to you as you begin the homebuying process.
No Money Down
One of the most appealing benefits of a VA Home Loan is that veterans can avoid any down payment when purchasing a home. Nick Smallwood, a Sergeant in the 1/142 Field Artillery Brigade of the Arkansas National Guard and Branch Manager with Hancock Mortgage, says “The VA loan (depending on remaining eligibility) allows a qualified Veteran or currently serving service member to buy a home for zero down up to the county loan limit.” Regardless of the size or location of the home, veterans can avoid paying even a penny in a down payment which helps make home ownership easier for the 18.2 million veterans.
In addition to avoiding a down payment, another benefit of VA loans is no private mortgage insurance. PMI is typically required when a homeowner is putting less than 20% down on a loan. While veterans are putting less than the standard 20% down, VA loans eliminate the PMI, an additional monthly charge. By avoiding PMI, veterans can enjoy a more affordable monthly mortgage amount.
What You Need to Know About VA Loans
Most banks and lenders offer VA loans, so finding a qualified lender is not a difficult process. However, before you pick your lender, it’s important to know what questions to ask of your lender. According to Mr. Smallwood with Hancock Mortgage, borrowers should inquire about the following items:
- VA doesn’t have a minimum credit score requirement. Instead, lenders set minimum credit scores. Ask your lender what their minimum credit score requirement is for VA loans.
- There are specific requirements for VA home loans. Find a lender that knows how to read and interpret the VA Handbook 26-7 to ensure the property and loan meet the requirements.
- Borrowers are required to obtain a Certificate of Eligibility. It is crucial that the lender or Veteran/Service member get the Certificate of Eligibility (COE) early in the process.
- It’s important that the lender is aware of the duty status of the individual. Depending on whether you are still serving or discharged, will depend on what type of documents you will need.
- Not all veterans are eligible for VA loans. Unfortunately, not all Veterans are eligible for the VA loan. Eligibility depends on time in service, and type of character at discharge (honorable, general, other than honorable, and dishonorable). Active duty, Reservist, And National Guard members could be eligible.
- VA loans are not just a one-time benefit for veterans. Instead, you can use the VA loan over and over again, as long as you have enough entitlement.
- You can begin the VA loan process and home search on Homes.com.
Inquire About Other Veteran Benefits
There are many steps in the home buying process, and while veterans utilizing a VA loan can avoid paying a down payment or PMI, there are still other expenses. For example, home inspections can be a few hundred dollars or more. It’s important to ask the home inspector if they offer any military discounts. In addition, some moving companies offer military discounts as well.