Summary

  • A VA loan is a mortgage loan guaranteed by the U.S. Department of Veteran Affairs (VA).
  • The VA loan was created to offer financing to eligible veterans and their surviving spouses with no down payment.

Advantages

  • No down payment required
  • Reduced or no funding fee for qualifying disabled veterans
  • No private mortgage insurance (PMI) allowed
  • Less restrictive qualification guidelines
  • Streamline refinance loan programs available
  • Access to low VA mortgage rates
  • Does not allow for extraneous loan charges

Disadvantages

  • One-time funding fee (which can be financed into the loan)
  • Sellers may be hesitant to sell to a buyer using a VA loan
  • Strict appraisal process making “as is” sales more difficult
  • Must be current or ex-military personnel to qualify (Certificate of Eligibility required)
  • Complex loan process as compared to other mortgage types

Who is Eligible for a VA Loan?

  • Veterans
  • Active Duty Personnel
  • Current or Former Reservists/National Guard members
  • Some surviving spouses

What are the Benefits of a VA Loan?

  • Purchase a home at a competitive interest rate often without requiring a down payment or private mortgage insurance, which gives you more savings.
  • Cash Out Refinance options allow you to take out cash out of your home equity to take care of concerns like paying off debt, funding school, or making home improvements.
  • If you have a service-related disability, you may qualify for waived funding fee, reducing closing costs.
  • Borrowers can often refinance to a lower rate within the VA program without requalifying for the program.
  • You can reuse the benefit.