What You Should Know About VA Loans?

VA is an abbreviation form of Department of Veterans Affairs home loans. It is considered as a powerful option which gives a great protection for eligible lenders and home buyers.

The VA Loan Guaranty Program is created in 1944 to offer financial support to returning military veterans who services for the country.

Suitable Groups and Areas

Guaranteed by U.S. Department of Veterans Affairs which has supported up to 18 million veterans on home loans, VA is aimed to a special group – American veterans (including their spouses and health service members). It is not limited to the groups mentioned before. The other eligible groups are undermentioned.

A. For reservists or national guard members, if they have served the country for at least six years with an honorable discharge, they can apply for VA home loan.

B. Disabled and discharged veterans

C. Foreign veterans or public service members who served for the country during World War II.

D. Widow or widower can also have potential possibility to apply for VA home loan as long as the death of their spouse’s is related to country service.

The basic purpose of VA Loans is to provide home financing support with no down payment to these eligible veterans with poor ability or less-than-perfect credit on purchasing their new properties in eligible areas.

These eligible areas designated by VA include rural areas, small cities and towns which are remote from metropolitan and other big cities and areas with less housing credits.

Key Benefits

VA Loans make big changes for millions of veterans’ lives. The most welcomed benefit of VA loans should be no down payment and up to 100% financing for purchasing a home. More benefits can be concluded as below.

1.VA home Loans saves the costs of private mortgage insurance and PMI (Private Mortgage Insurance) for appliers. In other words, it puts guarantee on the home loan and reduces the unnecessary insurance for eligible veterans.

2.Compared with conventional loans, VA home Loans presents a bit easier underwriting standards and requirements. According to a survey, most of borrowers who are not qualified for the conventional loans can get a VA home Loans which provide no PMI.

3.It has lower interest rates than conventional interest rates. Moreover, it sets no prepayment penalties.

4.VA home Loans has a higher ratios of allowable debt-to-income compared with other types of loans.

5.It sets no additional underwriting on its efficient refinancing loans.

Other Details

• Generally, VA home Loans allows up to $325,000 refinance which can takes 100% of your home value.

• It opens for middle class or first-time homebuyer with low risks. Compared with conventional loans, VA loans provide a large amount of loans and a mortgage with 41% monthly payment        loan for veterans who have a bit poor liquidity and cash reserves.

• It sets no prepayment penalties and flexible time for you to pay your mortgage.

• It includes two types of payment, fixed rate monthly payments with over 15, 20 or 30 years terms and ARM interest rate with 5 years fixed rates.


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VA Loan – A Great Choice for Veteran

Backed up by United States Department of Veterans Affairs, VA loan is 100% financing option aimed to offer financial support to a large number of veterans who want to purchase home with poor ability to afford the down payment. As a special loan, VA loan is also designated in certain areas such as credit shortage areas.