VA Loans
Purchasing a home is an opportunity for a significant investment. However, the financial barriers to homeownership often prevent people from buying homes and taking advantage of investment opportunities. Conventional home loans have high qualification standards and can be expensive, making it impossible for many prospective buyers to afford homes.
A VA loan is a mortgage product available only to veterans, active-duty service members, and surviving spouses or eligible family members. Some primary benefits include low down payments, no mortgage insurance, and competitive interest rates. TrueWay Mortgage is a lending expert who can simplify the VA home loan process for eligible borrowers.
What is a VA Loan?
The VA loan program was created by the Department of Veterans Affairs, a branch of the federal government. The VA provides insurance on VA loan products so approved lenders can offer homebuyers more flexible requirements and better loan terms. This government agency insures VA loans but does not provide them directly. Instead, a potential buyer can apply for a VA loan through an approved mortgage lender.
TrueWay Mortgage is dedicated to personalized service, so we offer tailored VA loan options to meet unique borrower needs. Our experienced team can help you determine if you’re eligible for a VA backed home loan, learn more about the certificate of eligibility COE, and take care of the funding fee.
How VA Loans Work
Private lenders who offer a VA loan program can help eligible borrowers access unique benefits. A VA home loan does not require any down payment to acquire the loan up to a specific loan limit. Despite no down payment requirement, borrowers won’t have to pay for private mortgage insurance. There is also no prepayment penalty fee.
Another significant VA home loan benefit is access to competitive interest rates. These financial benefits are possible because of the government’s backing, making VA mortgages far more appealing than conventional alternatives.
VA loans can be used simultaneously with adaptable housing grants for veterans with a service related disability. Veterans don’t have to find specially adapted housing. Instead, they can find a home they love and use grant money for any special housing adaptation necessary.
TrueWay Mortgage will help you seamlessly navigate the VA home loan process, making your journey toward buying a property as simple as possible. Our agents can explain everything you need to know about VA backed loans, including how to get your certificate of eligibility.
Benefits of Choosing a VA Loan
The VA home loan program offers substantial benefits. Its purpose is incentivizing veterans, active service members, and surviving spouses to purchase homes affordably by offering zero-down payments, lower interest rates, and no insurance premiums. TrueWay Mortgage is dedicated to helping qualified borrowers take advantage of these financial benefits.
No Down Payment Requirement
When most people buy homes, they put down money upfront to reduce the total loan amount. With a conventional loan, the lender may require 3.5% upfront at minimum, though some may demand 10-20%.
The minimum down payment for a $400,000 house would add at least $14,000 to your upfront costs. With a zero-down payment, you can save tens of thousands of dollars to acquire the property, making it easier to afford other closing costs. TrueWay Mortgage will work to maximize the benefits of VA backed loans to suit your financial needs.
No Private Mortgage Insurance (PMI)
Most lenders try to reduce risk when assessing potential borrowers. If a traditional home loan requires a low down payment, the lender can compensate for this increased risk by charging the borrower mortgage insurance premiums. These are typically assessed annually and paid with monthly premiums.
Even though you can avoid a down payment entirely with a VA home loan, private lenders won’t charge you mortgage insurance because the federal government covers the additional risk. This will save you thousands of dollars yearly, resulting in a lower monthly payment. TrueWay Mortgage will make it easy for any veteran, active-duty service member, or surviving spouse to leverage this benefit.
Competitive Interest Rates
The interest rate on a loan affects the total loan amount and the monthly mortgage payments. The higher the interest rate, the more money you spend each month and throughout the loan. You can access more competitive interest rates when you are eligible for a VA home loan. This lower interest rate will make homeownership far more affordable when compared to typical rates on conventional loans.
If you want the most competitive interest rates on the market, TrueWay Mortgage will help you access them with your mortgage. We’ve helped hundreds of reserve members and other eligible individuals receive financing for their new homes.
VA Loan Eligibility Requirements
The Department of Veterans Affairs has numerous eligibility criteria to limit the number of people eligible for VA mortgage loans. Some requirements relate to the type of military service, the length of service, and financial metrics.
For example, National Guard members must meet specific criteria. There are also loan limits you need to know. Loan limits may be based on things like a veteran's entitlement. TrueWay Mortgage will help veterans determine whether they qualify for a VA home loan benefit.
Certificate of Eligibility (COE)
VA lenders will have their financial requirements for their mortgage products, but one document every borrower will need is a valid Certificate of Eligibility (COE). You can request this document from the Department of Veterans Affairs confirming your eligibility for the program. You can request a COE online, through your lender, or by mail. TrueWay Mortgage will assist you when requesting your COE for loan qualification.
Credit and Income Requirements
Lenders require financial stability to offer home loans to borrowers. Generally, the minimum credit score for a VA mortgage is 620, though many borrowers acquire loans with lower scores.
You must also have enough steady income to afford the monthly payments outlined in the sales contract, so your lender may look for a maximum debt-to-income ratio of 41%. However, individual lenders like TrueWay Mortgage often make exceptions for unique financial situations.
Service Requirements
Qualified borrowers must meet one of the following conditions to be considered for a VA mortgage:
- At least 90 days of active service during wartime
- At least 181 days of active service during peacetime
- At least six creditable years in the National Guard or Reserves
- Be married to a veteran who died in the line of duty or from a service-connected disability
If you want to know more about your eligibility, speak with the experts at TrueWay Mortgage.
How to Apply for a VA Loan?
Understanding the application process for a VA loan is the key to starting your home-buying journey. Pre-qualification, finding a qualified lender, underwriting, and final approval are all essential steps that impact your timeline. TrueWay Mortgage is dedicated to providing personalized service focused on helping veterans and their families.
Initial Consultation with TrueWay Mortgage
The initial consultation with our team is essential to helping us understand your needs. We can discuss the specific VA loan options that suit your financial goals. Our team is small, so we communicate with prospective buyers one-on-one. Once we understand your needs, we can create a customized plan to help you acquire a VA loan.
Pre-Qualification
Process
Pre-qualification is highly recommended when entering the market for a residential property. It will give you an accurate picture of your budget when searching for homes. A buyer with a pre-approval letter is more likely to have their offer accepted. At TrueWay Mortgage, our pre-qualification process is simple and convenient, so you can quickly determine your budget for a home purchase.
Submitting Documentation
The primary method for evaluating your financial background is documentation. You will provide numerous documents with your VA loan application so we can assess your situation. Some standard documents in the loan application process are government IDs, the COE, military service verification, bank statements, W-2s, income statements, employment verification, tax returns, and VA loan entitlement information.
Types of VA Loans Available
VA loans come in several forms. While the most common product is a purchase loan for buying a residential property, there are also refinancing loans like cash-out refinances and interest-rate reduction refinance loans. The TrueWay Mortgage team will help you choose the best loan option.
VA Purchase Loan
The standard VA loan is used to buy a home. TrueWay Mortgage has plenty of experience granting these loans to eligible borrowers, so we can help veterans and eligible surviving spouses achieve their dream of homeownership. A real estate agent can help you find a house that meets VA loan requirements.
VA Cash-Out Refinance
If you own a home with a VA loan and want to tap into your equity, you can pursue a cash-out refinance. This results in a new loan larger than the remaining balance on your initial mortgage. You can receive the difference between this new loan and your total equity in cash, using it to pay for home improvements or other debts. If this is a suitable option, TrueWay Mortgage will help you pursue it.
VA Interest Rate Reduction Refinance Loan (IRRRL)
To lower your monthly payments, you can convert a VA home loan into an interest rate reduction refinance loan (IRRRL). This will save you money in the long run, lowering the total cost of the loan and monthly premiums. TrueWay Mortgage will simplify the process of refinancing.
Comparing VA Loans to Other Mortgage Options
There are multiple home loan products on the market that you can use to purchase a residential property and start building home equity. Let’s look at how VA loans compare to FHA and conventional mortgages and how TrueWay Mortgage can help you decide which purchase agreement is right for you.
VA Loans vs. FHA Loans
FHA loans are designed for borrowers with lower credit and lower incomes. While they are affordable, you will still have to pay a down payment and private mortgage insurance. At the same time, these can be avoided with VA loans.
VA Loans vs. Conventional Loans
Conventional mortgages are solid options if you have stable finances and strong credit. However, suppose you are a veteran, active service member, or surviving spouse. In that case, the benefits of no down payment or mortgage insurance are too good to pass up for a conventional mortgage.
VA Loan Limits and Funding Fees
There is no limit to how much you can borrow with a VA loan, but loan limits govern how much can be borrowed without a down payment. In most counties nationwide, the VA loan limit is $806,500. Borrowers must also pay a VA funding fee when they close, which can cost 1.25% to 3.3% of the home’s sale price. TrueWay Mortgage can help you understand these aspects of your VA loan.
Why Choose TrueWay Mortgage for VA Loans?
Our team is uniquely positioned to help veterans and their families acquire home financing. We know what it takes to support borrowers, understand their needs, and find the best VA loan product for their financial goals. TrueWay Mortgage can offer a stress-free experience from start to finish.
Contact Sam and Anisha Mauldin
TrueWay Mortgage
Start Your VA Loan Journey Today
If you are ready to discuss your VA loan options, TrueWay Mortgage can offer a personalized consultation to begin your path to homeownership. Call us today at 404-962-0032 to learn more about the VA loan program and its many benefits.