With more lenient guidelines than other loan programs, and higher debt-to-income ratios permitted, a VA loan is the right answer for military members, veterans, and their spouses. There are three types of VA loans offered.

VA-Backed Purchase Loan

A VA-backed purchase loan is a loan offered by a financial institution or mortgage company to purchase a primary residence.. To begin, you will need your Certificate of Eligibility, or COE, in hand, along with your current income documentation.

There is no down payment required for a VA-backed purchase loan.  There is also no monthly private mortgage insurance (PMI). That is similar to a Conventional loan except that to avoid PMI on a Conventional loan, you need to put down at least 20%. In addition, VA rates are lower.

Cash-Out Refinance Loan

A cash-out refinance loan allows borrowers to take advantage of lower interest rates, and also receive cash for equity in their home. Borrowers can borrow up to 80% of the current value of their home minus the current mortgage. Borrowers can use the cash to make home improvements, pay for college tuition, consolidate debt, purchase investment properties, or for any other purpose. You can apply with us to see if you meet the requirements for a cash-out refinance loan.

The Interest Rate Reduction Refinance Loan (IRRRL)

The Interest Rate Reduction Refinance Loan (IRRRL) allows applicants to take advantage of a new VA loan with a lower interest rate. Two big advantages are that an applicant does not need to have their home appraised to qualify, and there is no income or employment verification required. To be eligible for an IRRRL, you must currently have a VA loan that has been open for at least 210 days, and you must also be current on your mortgage payments.

For homeowners whose first mortgage had a variable interest rate, an IRRRL may be able to provide better stability by locking in a lower, fixed interest rate. An IRRRL has specific requirements, such as never having been delinquent (30 days past due) on your mortgage on any payment in the last 12 months.

The Potential Advantages of Obtaining a VA Home Loan

There are many potential advantages to obtaining a VA home loan, including the following:

• No down payment required

• No private mortgage insurance (PMI) required

• Competitive interest rates

• Ability to finance up to 100% of the purchase price

• There is no prepayment penalty

• You can use your VA eligibility to purchase a multi-unit property

VA Home Loan Eligibility Requirements

To be eligible for a VA loan, you must meet the following criteria:

• Serve or have served in the U.S. Armed Forces, including the National Guard and Reserves

• Obtain a Certificate of Eligibility (COE) from the VA

• Meet the service requirements outlined by the VA (Served 90 consecutive days of active service during wartime, 181 days during peacetime, or 6 years in the National Guard or Reserves)

• Or, be an unmarried surviving spouse of a veteran who died in service or as a result of a service-connected disability

Have questions?

Just give us a call. When you work with us, you will get a partner that is committed to helping you find the right  home loan for your unique situation.