What is a VA Loan?
Veterans Affairs loans, aka VA Loans, help veterans and active duty service members buy a home while taking advantage of some pretty significant benefits. A VA Loan is a government-based mortgage product guaranteed by the US Veterans Administration. President Franklin D. Roosevelt signed the loan into law back in 1944 to help military service members returning from World War II realize the American dream of homeownership.
The main benefit of a VA Loan remains as simple today as it was three-quarters of a century ago: If you qualify, a VA Loan will provide veterans and/or their surviving spouses with 100% financing. Also referred to as the GI Bill, a VA Loan is one of the few home financing products that require no money down.
Am I eligible for a VA Loan?
If you've served — or are serving in active duty — in US Military, you may be eligible for a VA home loan. This includes service in the Air Force, Army, Coast Guard, Marine Corps, Navy, or the National Guard. You'll need to get a Certificate of Eligibility from the VA and plan to occupy the property as your primary residence. Investment properties are not eligible under the VA Loan.
Additional eligibility requirements may need to be met depending on the duration and type of military service performed. As a general rule, veterans are eligible if they've served on active duty for 90 days during wartime or at least 181 consecutive days during peacetime.
If the borrower enlisted and began service after September 7, 1980, he or she would need to have served for at least two years. Likewise, if the veteran was an officer and began service after October 16, 1981. There's also a six-year requirement for National Guards and reservists.
Surviving spouses of a service member who went missing in action or was a prisoner of war may also be eligible, as long as they remain unremarried. Also eligible are surviving spouses of veterans who died on active duty or from service-related causes, and who remarried only after they turned 57 or after December 16, 2003.
Find all current eligibility requirements here.
Types of VA Loans offered
Purchasing
Movement Mortgage offers VA Loans for home purchase as fixed-rate mortgages with 15-year and 30-year terms and as a 5/1 ARM (adjustable rate mortgage.) One of the top benefits of a VA purchase loan is that if you qualify, you'll receive up to 100% financing without requiring mortgage insurance. This could mean hundreds of dollars of savings each year. Your loan officer will fill you in on what credit scores are required for each loan term.
Also, with Movement there are no lender fees, although VA Loans do require a Veterans Affairs Funding Fee of between 0% to 3.6% that may be financed into the loan or paid out of pocket at closing. And depending on the state you'll be buying in, there may be unique property tax reductions to military borrowers.
Refinancing
We also offer two refinancing options. Vets can refinance an existing VA Loan to reduce the interest rate or switch an adjustable-rate to a fixed-rate through the VA Interest Rate Reduction Refinancing Loan (IRRRL).
A nice perk here is that there is no appraisal or credit underwriting required. And our VA Cash-Out Refi offers qualified vets the ability to tap into up to 100% of their accrued home equity. A Movement Mortgage loan officer will look at the LTV (loan-to-value) ratio of our home to see if this refinance option is available to you.
Other things to consider:
When the “Blue Water Navy Vietnam Veterans Act” was signed into law in June 2019, the VA removed any lending cap. However, many VA Loan lenders still try to adhere to VA Loan limits, which vary from county to county.
Depending on your particular circumstances, you might find that mortgage rates on VA Loans are lower than those on conventional home loan products. That's another good reason to ask about VA Loans, if you qualify, of course.
So why choose a VA Loan?
If you're qualified, the answer is easy!
- 100% financing available, no down payment required
- Low closing costs
- Low mortgage rates
- High loan limits
- Low credit score requirements
- No mortgage insurance
Find out if a VA Loan right for you
Whether you're getting ready to buy a home or thinking about refinancing, finding the right loan can streamline the application process. If you meet the eligibility requirements for a VA Loan, do yourself a favor and include it in your mortgage search.
If you're a military veteran looking to buy, refinance a VA loan or want to learn more about VA homeownership benefits, let us know today. A local Movement Mortgage loan officer can answer your questions about eligibility and help you make the right decision. Find one in your area to get started.
