VA Mortgage Loans

Designed to offer long-term financing to veterans, VA guaranteed home loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible military personnel and veterans for the purchase of a home or refinance of an existing mortgage. The VA determines eligibility and issues a Certificate or Eligibility to qualifying applicants to submit to their mortgage lender of choice. It is generally easier to qualify for a VA mortgage loan than it is for conventional loans.

Here are the highlights of the VA mortgage loan:

• 100% financing without private mortgage insurance or a second mortgage.
• A VA funding fee of 0% to 3.3% of the loan amount (depending on military service) is paid to the VA (this fee may be financed or paid by the seller).
• When purchasing a home, veterans may borrow up to 100% of the purchase price or appraised value of the home, whichever is less.
• When refinancing a home, veterans may borrow up to 90% of appraised value.
• Closing costs are comparable and sometimes lower than other financing types.
• No monthly mortgage insurance premiums.
• The mortgage is assumable by a qualified buyer when the house is sold.
• Veterans can now refinance an existing non-VA mortgage into a VA loan.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan. 

Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to protect a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.

A VA mortgage loan can be used to buy a home, build a home and even improve a home with energy-saving features such as:

• solar or heating/cooling systems;
• water heaters;
• insulation;
• weather-stripping/caulking; and
• storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.

Go to VA mortgage loans to learn more.

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