Atlanta, Georgia, is one of the hottest real estate markets in the United States. However, home buying in this area can be challenging, especially given the current house prices. Most prospective homebuyers must secure financing to afford residential property, but conventional financing is sometimes out of reach.
You may be eligible for Georgia VA loans if you are a military veteran, active-duty service member, or surviving spouse. A VA home loan is more accessible to qualified borrowers because the Department of Veterans Affairs insures it. With the government’s backing, VA lenders can offer more favorable terms to veterans, active service members, and surviving spouses in the Atlanta housing market.
This article will review what you need to know about how VA loans work, including working with a loan officer, your loan amount, Georgia income requirements, and more.
Eligibility Requirements for VA Loans in Atlanta
The government and private lenders set eligibility requirements for the VA loan program. In terms of military service and how VA loans work, you must generally meet one of these conditions to be eligible for Georgia VA loans:
- At least 90 days of non-training active duty.
- At least 90 days of active duty with at least 30 consecutive days.
- 181 continuous days during peacetime.
- 6 creditable years in the National Guard.
Additionally, your lender or loan officer may require a minimum credit score and maximum debt-to-income ratio to secure a VA loan. In many cases, the lowest credit score you need to qualify for a VA loan is 620, though some lenders will make exceptions. The maximum DTI ratio could be 50% or less.
Benefits of VA Loans
A VA home loan offers numerous benefits to the borrower. There is no down payment or funding fee requirement to secure a VA mortgage. If you were to apply for an FHA loan, you would need at least 3.5%, but that’s not how VA loans work.
Conventional lenders often demand more upfront for the cost of the home. The zero-down payment option makes VA mortgage programs significantly cheaper upfront. There will be no private mortgage insurance (PMI) premium to add to your monthly costs, like Georgia homeowners insurance.
Another advantage of the VA home loan program is competitive interest rate options. The right lender can provide a lower interest rate on a VA loan than most FHA or conventional mortgages. The lower the interest rate on your VA mortgage loan, the less money you will spend on monthly payments and the total loan amount.
These benefits give Atlanta borrowers more financial freedom if they qualify for Georgia VA loans.
VA Loan Limits in Atlanta
There is no limit to the amount of money you can borrow with a VA loan. However, there is a limit to how much of that loan the federal government will guarantee. These VA loan limits are set each year and vary depending on your location.
For example, the loan limits in most Atlanta counties are higher than in most of Georgia. In general, the limit for VA home loans is $806,500 for a single-family home. The number may be higher in specific Atlanta markets., going as high as $1,209,750. Ask your lender about the loan limits in your desired market to understand the coverage limits of your VA home loan benefit.
Types of VA Loans Available
VA home loans are available in several categories. The most common Georgia VA loan is a purchase loan, which is used to buy a house that has already been built. Another option is a VA construction loan, which finances the construction of a new home that the borrower will occupy as their primary residence.
Refinancing is also an option if you secure your home with a VA loan and have been living there for several years. You can pursue a cash-out refinance, which takes out a new loan on the property based on your equity in the home to receive a lump-sum payment. You can use this cash for anything, including:
- Property taxes
- Supplemental income
- To pay debt
- Home renovations
Lastly, you can apply for an interest-rate reduction refinance loan, which creates a new loan with lower monthly payments.
How to Apply for a VA Loan in Atlanta?
Applying for a VA loan in Georgia is relatively simple, and many lenders offer an online application process. You will need numerous documents when applying, including government ID, bank statements, W-2s, income verification, military service verification, and your Certificate of Eligibility.
Once you apply for the Georgia loan, the lender will assess your credentials, await the property appraisal, request additional information, and grant approval.
VA Loan Approval Process
It typically takes several weeks, if not months, to approve a VA loan in Georgia, even though applying is relatively simple. During this process, the Georgia lender will check your VA loan entitlement, assess your finances, request documentation, run a credit report, and consider approving the application.
VA Loan Closing Costs
VA loan closing costs are comparable to closing costs for most types of mortgages, including attorney fees, property taxes, transfer taxes, and title search fees. The key differences are the lack of a down payment and the VA funding fee.
Avoiding a down payment will save you thousands upfront, but paying the VA funding fee will be an additional expense. It typically costs between 1.25% and 3.3%, depending on your full VA loan entitlement and whether or not you are a first-time buyer.
You can seek assistance with a down payment or closing costs, even with a VA mortgage. The Georgia Dream Homeownership Program offers down payment assistance, especially for first-time homebuyers. There is also the Homeownership Assistance Program available throughout the state of Georgia.
Finding the Right Lender for VA Loans in Atlanta
Finding success in the home-buying journey often depends on choosing the right lender. It is essential to select a lending partner with years of experience serving veterans, active-duty service members, and surviving spouses who apply for VA loans. You should also research reviews to ensure that the lender offers great customer service and personalized programs.
VA Loan vs. Conventional Loan: A Comparison
Conventional loans are one of the most popular mortgage products for prospective Georgia homeowners. However, you will have to pay a down payment, face higher interest rates, and worry about paying mortgage insurance if your down payment is less than 20%. A purchase with VA financing has no down payment requirement, no mortgage insurance, and more competitive interest rates.
Common Misconceptions about VA Loans
VA loans have some common misconceptions that often block eligible borrowers from applying. Some may assume you need years of military service to qualify, but that is not the case. Another misconception is that borrowers can only take out one VA mortgage.
If you have VA entitlement remaining, you can continue to take out these loans. It is possible to own multiple homes with VA loans, but there are residency requirements you must meet for each of them.
Impact of Credit Score on VA Loans
A borrower’s credit history plays a significant role in all types of Georgia mortgages. Although the VA has not set specific minimum credit score requirements, most lenders want to see at least 600 on your report. Higher scores typically qualify for lower interest rates.
Refinancing Options for VA Loans in Atlanta
Refinancing an existing VA mortgage can benefit you financially. If the value of your home has risen and you own a lot of equity, you can refinance to either lower your monthly costs or take out cash to invest in the property. The current market shows climbing home values, so your equity could be higher than you think.
Conclusion: Securing Your VA Loan in Atlanta
If veterans qualify due to military service, they should explore your options for VA home financing in Atlanta. The team at TrueWay Mortgage can help you navigate the landscape of mortgage applications, including VA eligibility, credit requirements, and closing costs. Call us today at 404-962-0032 to find out more about the VA loan advantages.
