How does a VA home loan work? Is it true there is no down payment required?

Question

I have been out of the military for ten years now, but was told that I would qualify for a VA loan. How do you apply? How you find out if you are qualified? Is it really true there is no down payment required? What are the interest rates? Any information anyone can provide me would be great.

Answer 1

VA Loan Information: Visit the home page of the VA. http://www.va.gov/

http://www.vamortgagecenter.com/

The VA has increased their loan limits! The maximum loan amount in most cases is $417,000. The VA also offers some advantages over conventional loans:
Other benefits of a VA Loan:
1. No Down Payment required at closing
2. Lower closing costs than conventional loans
3. No prepayment penalty if you pay off your VA loan early
4. No monthly Private Mortgage Insurance payment
5. The lender is willing to negotiate your interest rate

GOING TO THIS SITE, IS A MUST: http://www.homeloans.va.gov/veteran.htm

Answer 2

What's been posted at the official government Veterans Affairs link here provides you with the answers to most of your questions, BUT there are some extra things you ought to know.

1st see this: http://www.homeloans.va.gov/faqelig.htm.

Be advised, however, that in spite of the various advantages like no down payment required and no PMI, a VA loan may not be the best one for your circumstances. Some examples:

(1) It may not be the lowest interest rate. If you have a good score or are eligible for other special programs (many states have first time homebuyer programs with excellent rates) the VA loan might not be the lowest rate.

(2) VA loans can't be used for buying investment property.

(3) The "no down payment" required isn't exactly true -- the lower your down payment, the more likely a vet will have to pay a funding fee, often up to 2% of the loan amount. This could be as much as 8000 on the current maximum loan amount, on top of other closing costs (see the VA web site for examples).

Bottom line -- the VA loan is a nice benefit that in many cases provides a veteran with a better way to finance a home purchase. But the prudent shopper will look at all the choices and decide based on their own personal situation.

Answer 3

2

Answer 4

The VA loan program has 2 stages. In stage 1, the project’s feasibility and eligibility is judged. In stage 2, the credit reports and financial information of the sponsor are reviewed. Sponsors are leading companies and financial institutions, such as the developers of the housing program.

These are the two stages of the VA loan application processes.

The Department of Veterans Affairs sends a Notice of Funds Availability. A NOFA is a document that includes the announcement, and the invitation, of the United States Department of Veterans Affairs to financial institutions to assure a certain loan. It is for a multi-family transitional housing loan.

Next, the Veterans Affairs office collects every submitted application. This is the real Stage 1 of the whole process. VA gets all the requests and the statement of interest sent by the companies and institutions, ready to guarantee or sponsor the project.

Then the VA okays the projects. After a few in-house scrutinies, the list of authorized institutions is declared. Besides the authorization, VA also sends out the conditional commitment that the approved projects should fulfill. This step is the final one for the initial stage of the application process.

VA asks for documents. It goes to stage 2 for the approved companies and institutions. Here it individually scrutinizes the credit reputation of the institutions. All approved projects executed by their executing institutes are thoroughly checked. This ensures the funds for veterans are used only for its intended purpose.

The Department of VA examines the applications. Once they get all papers, the Department personally monitors the application process. It achieves it by reviewing and checking every document sent over to them. This will help them a lot in finding the ability of the applicants.

The Department finalizes the applications. After a lengthy pondering and proper research, VA is prepared to authorize the eligible applications. Now a firm commitment along with the approval is sent.

VA finalizes the loan. After the loan is finalized, VA offers an assurance on the loan. It is the final stage of the whole process. At this time, VA is ready to give the committed funds.

These are the 7 steps that are strictly followed each time the United States Department of Veterans Affairs gives out a loan. The process may seem lengthy and boring, but this is the method by which VA ensures the institutions getting the funds deserve it.

Once the project is finished, the veterans, who are really the direct beneficiaries of the funds, are qualified to shift into the project’s premises. The necessary supportive services have been established to further assist the veterans to make these homes permanent.

Answer 5

How Do Va Loans Work

Answer 6

To get a VA loan you have to have served in the military for a minimum of 180 days ( non training ) or be an active member of the reserve or national gaurd for a certain period of time. If you are the latter you have prove membership by having a particular form completed by your unit administrator and signed by yoiur commander verifying your membership. If you are out of the military you will need to go to your local veterans administration office and get a certificate of eligibility which proves that you are ellibible for a VA loan. You hae to have 12 months of clean credit
which means no delinquencies. Talk to your banker , they can give you additional information on the requirements.

Answer 7

- You can get 100% financing with no mortgage insurance which means your entire interest payment is tax deductible.

-You can get approved with less than perfect credit and still get a great rate.

-The current maximum VA loan amount is $417,000.

-One of the great benefits of using a VA loan is that you can do the loan with no money down

Answer 8

Hello -

I've noted the other websites that were listed by my fellow yahoo posters. Therefore, I'd like to explain in more detail the questions you've asked -

UNCLE SAM WANTS TO HELP YOU BUY A HOME

The U.S. Government wants for you to own a home and they will go the extra mile to help you afford one. Why? Well, every time one home is built, the effect on the economy is quite significant. Think of all the people involved in the construction of a new home, for instance. Welders, Electricians, Carpenters, Plumbers, Framers, Roofers and others are greatly affected by your choice to purchase a home.

- Little or NO Down Payment
- Uncle Sam has programs like FHA and VA that can help you get into a home with a low down payment, or in some cases, with ZERO down.
- FHA and VA Programs - If you read our mortgage glossary, which is available at http://www.freemortgageinformationsoutherncalifornia.com/glossary.aspx, you will discover that FHA stands for 'Federal Housing Administration' and that VA stands for 'Veteran Affairs'. Get familiar with these programs, because they just might be your ticket to the American Dream.

HOW TO DETERMINE IF YOU QUALIFY FOR AN FHA OR VA LOAN

- VA Specifics

- The VA Loan allows active or honorably discharged military personnel to obtain a home loan with 0% Down Payment. In addition, the seller is required to pay a large portion of your loan closing costs!

- Do You Qualify for a VA Loan?

- To determine if you qualify for the VA loan, you simply need to meet the following criteria. First, you must be either active in one of the Armed Forces or an honorably discharged military veteran. Second, you must have reasonable debt-to-income ratio. This means that your current bills (car loan, student loans, bank loans and credit card bills) cannot exceed 41% of your income.

- FHA Specifics - If you don't qualify for a VA loan, then you should look into an FHA Loan. The FHA Loan Program allows little or no down payment, depending on your circumstances. The largest down payment you may be required to provide is 5% down. In addition, the FHA loan is also very liberal, in that, it allows a 41% debt-to-income ratio (including your mortgage payment), just like the VA Program.

- Do You Qualify for an FHA loan? - If you have proof of employment, a small down payment, and a decent payment history for your other bills in the last two years, you would likely qualify for an FHA Mortgage.

- What if you are Self-Employed? - If you are self-employed, that's OK too. We will simply need proof of income from your most recent tax returns. If you can provide this, and meet the regular criteria for an FHA loan as listed above, you qualify!

GETTING PRE-APPROVED IS THE SMARTEST MOVE YOU CAN MAKE

In many areas of the country, home sellers won't even speak with you unless they can confirm that you will qualify for the financing to purchase their home. In addition, you need to make sure you know how much you qualify for so you can avoid wasting time and effort inquiring about homes that are priced above what the lender determines you can afford. Get pre-qualified. It's fast, easy and best of all AT NO COST!

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- If you don't qualify, we'll be honest and professional, giving you the same respect we would give an A+ credit borrower. We'll show you why you don't qualify and then give you a specific plan to follow so that we can provide you with home financing sooner, rather than later.

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Please let me know if you have any further questions.

Best Regards,
Darren Meade

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