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VA Loans: A Great Benefit for Our Nation's Veterans

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Photo: Homeownership is one way to thank them for their individual service

Homeownership is one way to thank them for for their individual service

Whether you’re a soldier returning from active duty, a reservist, or a Veteran of a past conflict, your country thanks you for your service. It’s only fitting, then, that a grateful nation also provide its Veterans with benefits aimed at enriching their quality of life. Without question, one of the best Veteran benefits continues to be the VA Loan program, which has enabled more than 20 million Veterans to achieve the American dream of homeownership.

Since 1944, when FDR signed the Servicemen’s Readjustment Act, the Veterans Administration (VA) has been providing VA Mortgages to eligible Veterans which have many attractive features, including a zero down payment option for a home purchase and a number of outstanding refinance programs such as a cash-out refinance or a streamline refinance program with no lender fees.

Buying a home can be an intimidating process, even for someone who’s served in the military. Here are some helpful tips to keep in mind if you’re a veteran looking to buy a home with your VA Loan benefit:

  • Find your VA Certificate of Eligibility (COE). By far the most important document to locate is your Certificate of Eligibility (COE), which enables your lender to calculate how much your VA Loan benefit is and thus how much house you can afford. Many Veterans are given a hard copy of their COE after they’ve been discharged, but if you’ve misplaced your COE you’ll need to get a new one. More information.

  • Get preapproved by your lender. Once you’ve got your COE in hand, it’s smart to get preapproved by your lender. Not only is getting preapproved quick and easy, but in this highly competitive housing market many realtors insist on potential buyers having a preapproval letter in hand.

  • Remember, there is no VA down payment requirement. Saving for a down payment is oftentimes cited as the #1 reason why people can’t buy a house. However, with a VA Loan, there is no down payment requirement which makes VA Loans a far less expensive option to buy a house.

  • Interest rates for VA Loans are currently lower than other types of home loans. Now is a great time to buy a home, especially with property values rising and interest rates near their historic lows. Even better, interest rates for VA Loans are currently about .50% lower than Conventional Loans, which could save you an average of $3,100 per year on a $250,000 mortgage.

  • Avoid excessive lender fees. This tip applies to any homebuyer whether you’re a Veteran or a civilian, but in the case of Veterans it’s especially important because lender fees can count against the amount of your VA benefit. In other words, if you want to get the most out of your VA Loan eligibility, choose the lender who charges the least amount of closing costs.

  • Don’t listen to the media—VA Loans are not “hard to process”. A popular misconception about VA Loans is that they’re more difficult for a lender to close than other loans. While it’s true that VA appraisers occasionally require that items such as peeling paint or handrails be repaired, these rules are intended to protect the Veteran and not prevent them from buying a house. In our experience, VA Loans are just as easy to process as other loans and we’ve never heard of any mortgage lender declining to take a VA Loan application because “they’re just too darn hard to close.” Quite the opposite, in fact.

  • The VA offers a great refinance program—the Interest Rate Reduction Refinance Loan (IRRRL) Program. For those Veterans who already have a VA Loan, the VA allows you to do a “streamline refinance” of your VA Loan without an appraisal and without having to fully requalify all over again. Some lenders like James B. Nutter & Company even offer this program with no closing costs. This means that Veterans can take advantage of lower interest rates and refinance with a minimal amount of red tape and expense.

Whether you’re a Veteran or the family member of a Veteran, please accept our deepest gratitude for your service to our country. The least our country can do for you is to help you enjoy the benefits of homeownership. By keeping these helpful VA Loan tips in mind, you can use your VA Loan benefit as it was originally intended—to reward you for your service and help you enjoy your civilian life as much as possible.

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