A VA Loan is a military service benefit provided for eligible veterans, service members, and surviving spouses.
VA Loans are backed by Ginnie Mae and they offer many benefits over conventional loans. Some of the advantages are interest rates which are lower by .25%-.5%, no down payment requirement, flexible credit requirements, and no PMI. With a VA Loan, when you are looking to purchase or refinance a home, you can qualify for a low-cost mortgage, even if your credit score isn’t the best.
Most people who get a VA Loan are responsible for paying a funding fee, which covers the cost to taxpayers. The typical first-time funding fee is 2.3% and for any VA use after that, the funding fee is 3.6%. Ultimately, the cost is determined by your type of service, the size of your down payment, whether it’s your first time getting a VA Loan, and whether you are buying or refinancing. In most cases, if you don’t have the money upfront, the fee can be added to the price of the home and the borrower is not responsible for paying this out of pocket.
If you are currently serving in the military or are a veteran, you must meet at least one of the following in order to qualify for a VA Loan:
- You served 90 consecutive days of active service during wartime.
- You served 181 days of active service during peacetime.
- You served more than 6 years of service with the National Guard or Reserves or 90 days under Title 32 with at least 30 of those days being consecutive.
You will need to present a certificate of eligibility to your lender showing proof that you meet the criteria in order to qualify for a VA Loan. Once you do, you then need to review your income, assets, credit, and the property you are buying.
Bottom line: is a VA Loan right for you? Our experienced loan officers at Georgia Platinum Mortgage are here to help you find out.