Veterans can obtain inexpensive financing through VA loans and most of them have heard about them. However, seldom know the specifics about these loans, the eligibility requirements, the entitlement, the uses that these loans can receive and the advantages of financing through a VA loan instead of a regular home mortgage loan.
Following are the facts about VA loans:
It’s important to note first that the VA is not an actual loan but a loan guaranty process. The Veteran Administration does not act as a lender but guarantees the repayment of the loan thus reducing the risk implied in the transaction for the lender that in turn can provide lower interest rates and more advantageous terms for military veteran applicants.
Eligibility Requirements For VA Loans
There is an automated certificate of eligibility that can provide you with all you need to obtain the VA Loan. However, the database that generates these certificates is not always up to date nor does it contain information on every single applicant. Therefore, you may need to fill a form known as request for certificate of eligibility which once processed will be answered with the certificate you need to apply for a VA Loan. All this needs to be done either at the regional eligibility center that corresponds to your area or through mail. In the last case, you can obtain the forms along with instructions online.
Entitlement For VA Loans
Getting in touch with a credit counselor to guide you through the ways of improving your credit is a good idea if you think that your credit won’t allow you to qualify for the loan. Also, the income is an important issue. The guaranty will apply only if your income and finances let you afford the monthly payments on your loan. Otherwise, you won’t qualify for the guaranty and thus, you won’t get approved for the VA loan. That being said, planning ahead and putting your finances in order prior to applying is definitely the way to go.
Advantages Of VA Guaranteed Loans
One of the advantages that you obtain with VA guaranteed loans is that you won’t be forced to put money down in order to purchase a property. No down payments are required if you can get approved for a VA guaranteed loan. Moreover, veterans can obtain refinancing instead of a home loan with a promotional reduced rate also. Finally, since there is an additional guarantee for the lender provided by the VA, there is no need to charge private mortgage insurance and you can avoid paying it.
Uses Of VA Loans
Though Veteran Administration loans are usually used for purchasing a new home, they can also be used for other purposes. Regulations are not that rigid on this particular issue. You can use the money (if you qualify for a home loan for a higher amount than what you need) to purchase a home and make some major improvements also, as if part of the loan was a home improvement loan based on equity.
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Jessica Peterson writes for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.
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