Buying a home with a VA loan

Current members of the military, veterans, and surviving spouses can become homeowners with affordable loans from the U.S. Department of Veterans Affairs (VA).

Whether you’re an active duty service member, a veteran, or a military spouse, a VA loan offers a number of advantages. You typically don’t need a down payment, and your overall expenses are reduced thanks to lower closing costs, interest rates, and the elimination of fees associated with other types of loans.

Advantages of a VA loan

VA loans help lower the overall cost of becoming a homeowner. Here’s a look at some of the cost-reducing features these loans offer:

• No down payment required. This can be helpful if you’re a first-time homebuyer or don’t have extra cash available for your purchase.
• No private mortgage insurance (PMI) or mortgage insurance premiums (MIP). By eliminating these costs, a VA loan can give you a substantially lower monthly payment.
• Lower closing costs and interest rates. Lower closing costs will save money up front, and the lower interest rate with a VA loan will reduce the total amount you pay over the life of the loan.
• Limited fees lenders can charge. VA loans offer an advantage over conventional loans by capping the fees charged by your lender.

More leniency for past bankruptcy or foreclosure. You can still potentially qualify for a VA loan even if your credit history includes a bankruptcy or foreclosure.
No penalty for early payoff. Some conventional loans charge a penalty if you pay off the loan early. VA loans can be paid off early without penalty, helping you save money.

VA loans can be used to buy a new house, refinance existing loans, or to use the equity in your home to pay for school, home improvements, or other needs.

Because VA loans don’t require a down payment, borrowers pay a one-time funding fee that helps reduce the cost of the loan to US taxpayers. However, you won’t have to pay this fee if any of these circumstances apply:

• You are receiving VA compensation for a service-related disability.
• You are eligible to receive VA disability compensation, but you are receiving retirement or active-duty pay instead.
• You are the surviving spouse of a Veteran who died in service or from a service-connected disability, or who was totally disabled, and you are receiving Dependency and Indemnity Compensation (DIC).
• You are a service member with a proposed or memorandum rating, before the loan closing date, saying you’re eligible to receive compensation because of a pre-discharge claim.
• You are a service member on active duty who before or on the loan closing date provides evidence of having received the Purple Heart.

Review the qualification requirements

All of these conditions must be true of the servicemember to qualify for a VA loan:

• They must meet the VA’s Certificate of Eligibility (COE) standards.
• They cannot have a dishonorable discharge.
• They must meet the active duty service requirements for when they served.
• They (or their surviving spouse) must live in the house they’re buying.
• They need the appropriate credit and income to qualify for the loan.

Helpful information VA loan requirements and qualifying for the COE can be found here: https://www.va.gov/housing-assistance/home-loans/eligibility/

Ready to get started? Contact your mortgage loan officer to learn more about getting a mortgage.