As members of our military, there are certain benefits afforded to you and your family. One such benefit is assistance with buying or refinancing your home. The United States government makes it easy for U.S. military members to afford their homes through a number of mortgage and loan programs. These loans are not only less restricted than civilian conventional loans, but are additionally backed by the United States Department of Veteran Affairs.
To gain a better understanding of the qualifications and loan types available, Lend Plus reviews everything you need to know.
In order to be eligible for a VA Loan, only active service members in good standing and those veterans who were honorably discharged will be considered. In addition to the good status, there is a continuous days of service requirement that needs to be fulfilled as well. During wartime, the minimum is 90 days, whereas during times of peace, the minimum is 181 days. Both of these requirements are waived if the applicant was discharged due to service-related injuries.
In relation to family benefits, there are restrictions as to who can apply and receive as well. Children of deceased veterans are not eligible for the VA loan benefits. However, spouses of deceased service members are eligible if certain criteria are met.
For the full list of VA eligibility, please visit the U.S. Department of Veteran Affairs.
Types of Loans
There are two types of loans available under the VA Home Loan benefit: purchase and refinance.
- Purchase: One of the great things about VA loans is that you do not need a down payment for loans that equal or fall below the local conforming limit. The national average is $424,100. If you opt to purchase jumbo loan; however, the VA requires that you pay a 25% different between the loan amount and the loan limit.
- Refinance: VA loan eligible borrowers may also utilize the program to refinance their home through a VA streamline (aka interest rate reduction refinance) or through a VA cash-out loan. The VA streamline lowers an already existing VA mortgage loan and does not require credit checks or appraisals. The VA cash-out option does involve a credit check and appraisal, as the value of the home is the maximum loan amount for the new loan.
One thing that needs to be noted about VA home loans is that the loan must be in reference to your main residence. You cannot use a VA home loan for vacation houses or to purchase secondary homes. Additionally, VA loans can be used for home improvement needs as well.
For more information about how Lend Plus can help you with finding and securing the right VA Home Loan for you, be sure to visit lendplus.com.