Veteran's Guide to VA Home Loans

VA Loans are an excellent option for people who served in the US military and now wish to purchase a home. These loans come with special protections that make it easier to qualify and that allow you to realize significant savings. 

What is a VA Loan?

VA Loans are loans from private lenders such as banks, credit unions and mortgage companies that are guaranteed by the federal government. They are available to most veterans, current military members, National Guard members and reservists. The spouses of individuals who died during active duty or as the result of a disability connected to their service may also apply. Active military members may qualify for VA Loan after serving for six months. Those in the Reserves or the National Guard may qualify after six years of service; however, if they are called for active duty before six years, they can apply after 181 days of service.

What are the Advantages of a VA Loan?

VA Loans are guaranteed by the federal government. That means if the borrower is unable to pay, the lender does not risk losing their payments from the loan. This makes VA Loans easier to qualify for than some other loan options. Borrowers may also prepay VA Loans without penalty, which can save thousands in interest over the life of the loan.

Lenders who take advantage of veteran borrowers or who decline to make loans to eligible borrowers on the basis of family status, national origin, race, sex, religion or disability are banned from the program. This protects veterans from bad lenders. Additionally, lenders are encouraged to extend forbearance when a borrower is temporarily unable to meet the terms of the loan. This can protect individuals who are temporarily ill or out of work from losing their homes. 

How Can a VA Loan be Used?

VA Loans can be used to purchase a new or existing house or condominium, be it in Cortez or elsewhere, as well as for the costs of new construction. These loans can also be used to upgrade a home in ways that contribute to energy efficiency, such as through adding weatherization or solar to a home. It can also be used to refinance an existing VA Loan in order to net a lower interest rate.

What are the Up-front Costs?

One of the things that makes a VA Loan so attractive is that it eliminates the need for a down payment. Individuals who qualify for a VA Loan are not required to make this significant payment to qualify for their loan. Since down payments can sometimes be as high as 20% of the loan value, this makes a VA Loan a far more feasible option.

However, certain funding fees and closing costs are likely to apply to the loan. In most cases, you will have to pay at least a portion of these up front. Make sure you have a certain amount saved to cover these sorts of costs. 

The VA Loan allows many who would not be able to afford a home of their own to enjoy the benefits of homeownership. Through this program, people can get to homeownership faster and begin building the wealth and security that homeownership provides. Do you qualify for a VA Loan? This program can help you get the home that you want and enjoy a better standard of living.