VA Loans: Mortgage Loans for Veterans
by Lisa Phillips
May 2007
by Lisa Phillips
May 2007
VA loans are available to active and former members of the armed
forces who meet certain criteria for length and time of service.
These loans are guaranteed by U.S. Department of Veterans Affairs.
The Department of Veterans Affairs does not originate the loans but
they do guarantee the loans made by lenders. The guaranty
replaces the protection the lender normally receives by requiring a
down payment allowing you to obtain favorable financing terms.
Basic Features of a VA Loan:
No Down-Payment. Most VA loans do not require any down-
payment, have lower interest rates and are fairly easy to qualify for.
Maximum Loan Limits. The VA does not have a maximum loan
amount; however, since lenders sell loans on the secondary market,
they generally limit loans to $417,000 or $625,500 in high-cost areas
Eligibility Requirements. The VA will determine your eligibility and
issue a certificate if you comply with the requirements but primarily
active and former members of the armed forces, Reservists and
National Guard members who have served at least six years, even
widows, provided the spouse's death was service related, may be
eligible. See (www.homeloans.va.gov) for more information.
Benefits of VA Loans.
forces who meet certain criteria for length and time of service.
These loans are guaranteed by U.S. Department of Veterans Affairs.
The Department of Veterans Affairs does not originate the loans but
they do guarantee the loans made by lenders. The guaranty
replaces the protection the lender normally receives by requiring a
down payment allowing you to obtain favorable financing terms.
Basic Features of a VA Loan:
No Down-Payment. Most VA loans do not require any down-
payment, have lower interest rates and are fairly easy to qualify for.
Maximum Loan Limits. The VA does not have a maximum loan
amount; however, since lenders sell loans on the secondary market,
they generally limit loans to $417,000 or $625,500 in high-cost areas
Eligibility Requirements. The VA will determine your eligibility and
issue a certificate if you comply with the requirements but primarily
active and former members of the armed forces, Reservists and
National Guard members who have served at least six years, even
widows, provided the spouse's death was service related, may be
eligible. See (www.homeloans.va.gov) for more information.
Benefits of VA Loans.
- Loans are assumable, provided the person assuming the loan
is qualified.
- No Prepayment Penalty.
- Buyer closing costs are limited by the VA.
- No monthly mortgage insurance premium (PMI).
- Assistance from the VA is available if veterans encounter
problems making mortgage payments.
- Various loan options: fixed rate, adjustable rate, graduated
payment and growing equity.
- Purchase a home including townhouse or condominium unit in
a VA approved project.
- Build a new Home.
- Purchase and Improve a home simultaneously.
- Home Improvements related to energy efficient features like
solar heating and cooling, insulation, water heaters, weather-
stripping, storm windows and doors, and other energy efficient
products. These features may be added with the purchase of
an existing home or by refinancing a home owned and
occupied by the veteran.
- Refinance an existing home loan up to 90 percent of the VA
established value or to refinance an existing VA loan to
reduce the interest rate.
- To purchase a manufactured home and/or lot.
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Related Topics:
- FHA Mortgage Loans, Basic Features and Loan Limits
- The Benefits of Fixed Rate Mortgages
- Hard Money Mortgage Loans
- Adjustable Rate Mortgage Loans
- Negative Amortization Mortgage Loans
- Interest only Mortgage Loans
- Balloon Payment Mortgage Loans
- Benefits of making Bi-Weekly Mortgage Payments
- Options to Foreclosure
- Stop Foreclosure with Forbearance
- How to Request a Mortgage Loan Modification
- Downpayment Assistance Listed by State
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