VA Loans

Veterans can get inexpensive financing through the VA loans and many are aware of these loans. Still, only few possess a thorough knowledge of these loans, the privilege, the eligibility requirements and the benefits of financing through the VA loan in place of a private home mortgage loan. It is imperative to note that VA is not a real loan but a loan guarantee process. Veteran Administration is not a lender but it guarantees the refund of the loan thus the risk involved in the transactions for the private lender decreases. So, this in turn offers lower interest rates and beneficial terms for the veteran applicants.

VA home loans are offered to veterans, active service members, reservists and Public Health Service members. Veterans who take VA mortgage loans are mostly first-time homebuyers. The law requires veterans to pay a single funding fee on the VA home loan. VA home loans are useful in getting cash out of the mortgage and also the veterans can upgrade or repair their homes using the loan.

VA loan is a wonderful option for a veteran homeowner as getting credit is not a problem. Even when a veteran declared bankruptcy in the past and the bankruptcy has been set free for two years, he/she is eligible for the VA loan. VA guarantees a minimum 25 percent of the amount of the home loan and the maximum loan amount is $359,650. Usually, the realistic market value of the property or the acquiring price, whichever is less, in addition to the funding fee may be borrowed. However, all veterans should qualify for the loan as they are not automatically entitled for the program.

The veteran can meet a credit counselor to find the ways to enhance their credit score if they think they may not meet the requirements of the VA loan due to their terrible credit. Also, the income of the veteran is an important factor to be considered before applying for the loan. The guarantee will apply only when the income is sufficient enough to afford monthly payments towards the VA loan. Otherwise, the veteran will not qualify for the guarantee.

There is also a computerized certificate of eligibility which can offer the veterans all they need to get hold of the VA loan. However, the database that produces these certificates is not all the time up to date and also it may not contain information on each single applicant. Therefore the veteran may have to submit a request which is acknowledged as application for certificate of eligibility. When the application is processed and the certificate is provided, the veteran can apply for the VA loan. All these things have to be done at the respective regional eligibility center corresponding to the area they reside or through mail.

When the application is submitted through mail the forms along with instructions can be obtained online. The main advantage of getting a VA loan is that there is no down payment. Also, due to the additional guarantee offered, the borrower can get loan at a cheaper rate. So, the veterans can benefit from the VA loan if they know where to and how to apply for the loan.

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