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VA Home Loans

The VA home loans are the special mortgage loans in the United States which are guaranteed by the US Department of Veterans Affairs (VA). Only the qualified lenders are eligible to issue these loans. Generally, this targets at offering long-term financing solutions to the eligible veterans of the United States or their surviving spouses. Generally, much private financing options are not available for the veterans. The VA loan aims bridging this gap and assists the veterans purchase properties with no down payment. The Department of Veterans Affairs have identified credit shortage areas of small cities, villages and towns as prospective areas which require which lack loan facilities.

The extant rule permits US veterans 103.15% financing without private mortgage insurance. A fee of 0-3.15% is paid to VA. There is no monthly PMI to avail this scheme. But greater part of the mortgage payment directly go towards qualifying for the loan amount. The veterans are eligible to receive larger than the traditional Fannie Mae conforming loans. The maximum loan amount guaranteed varies region wise. Generally, the upper limit of VA loan amount is $417000. But this limit may go up to as much as $1094625 in certain designated high-cost areas.

Eligibility for a VA Home Loan

The VA home loan journey of the veterans begins with the application for the Department of Veterans Affairs Certificate of Eligibility through VA Form 26-1880. The individuals who are eligible to apply for this program include veterans, active duty personnel and the members of the Guard and Reserve. The surviving spouses of the veterans are also eligible to apply for this program by either using the VA Form 26-1880 or through online. Filing the VA Form though may apparently look very simple, but it has not been completely standardized. According to the rule, veterans, Reservists and National Guard members and active duty service members can apply either online, by mail or via the lender.

In many cases applications can be made through online. The borrowers however have to be sure about the required paperwork required to get it done through banks. It is recommended that the borrowers should visit the official site of the Department of Veterans Affairs so as to get to know about the required evidence needed to apply at the bank. Reservists and National Guard members who have never served on active duty should also apply for the loans in the above mentioned way.

Surviving spouses of those who died while on duty have to submit a VA Form 26-1880 through mail. The form can be downloaded online. One may also request a form to be mailed to you by calling 1-888-244-6711.

VA Loan Requirements

Before the initiation of the loan process, some basic information for all the loan applicants should be there. These are listed below.
  • Social Security numbers
  • The current gross monthly salary of the applicant
  • Residential addresses for the past two years
  • Names and addresses of employers of the applicants for the past two years
  • Names, addresses, account numbers and balances on all checking and savings accounts of the applicant
  • Names, addresses, account numbers, balances and monthly payments on all open loans
  • Addresses and loan information of other real estate owned
  • Estimated value of furniture and personal property
  • Certificate of Eligibility and DD214, (this is applicable for the veterans only)
  • W2’s for the past two years and current check stubs
  • The self-employed individuals are required to furnish personal tax returns for the past two years, current income statement and balance sheet for the business
Apart from all these, the applicant also needs to pay for a credit report and appraisal of the property.

VA Home Loan Refinancing

Sometimes an applicant requires additional cash flow for a genuine need. It may be due to paying the tuition fee or funds may be required to make improvements that will increase the value of the home prior to its sale. One may also be willing to take advantage of the low rate of interest so that one can keep more of his or her hard-earned money in his or her own pocket.

Below here we describe about the options available for refinancing the VA home loan.
VA Loans for Home Equity Refinancing

These are required to meet various objectives. One can utilize the money to pay for college tuition, to consolidate high interest credit card debt, for buying a new car or to make home improvements. The VA loans offer the applicants different options to get the cash he or she requires through a refinance.

A VA refinance transaction refers to the repayment of the existing real estate debt from the earnings of the applicant’s new VA mortgage that has the same borrower utilizing the same property. This is known as ‘Cash Out’ Refinance. Cash-Out Refinances are generally utilized for homes that are used as a primary dwelling by its owner. That owner can refinance for up to 90% of the appraised value plus all closing costs if the property can hold up the designated loan to value ratio. There is no minimum amount of time that you must own your home, yet your home must have sufficient equity to qualify for the loan.

VA Streamline Refinance

The VA has set up a program called the Streamline Refinance to make a way for present VA homeowners to lower their interest rate with little or no out-of-pocket costs. The important features of these loans are that they can be made faster and with less documentation than a standard loan. A Streamline Refinance allows the applicant to refinance their current mortgage interest rate to a lower rate than they are presently paying. This is available only to veterans who are refinancing their original VA mortgage and utilized their original eligibility.

‘No Cost’ Streamlines allow the people refinance their mortgage with no out-of-pocket expenses. One option could be that the lender would pay the costs in exchange for a higher interest rate. In another option, the lender would obtain the market rates so as to roll the closing costs into the new loan.

VA Home Loans