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Unique Guide to VA Home Loan 2022

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Guide to making a VA home loan 2022

For example, a mortgage program offers some Americans a home loan with no down payment and no private mortgage insurance requirement. In addition, closing costs are limited and if the home is newly built, the builder must provide the buyer with a one-year home warranty.


Despite the obvious benefits of the program, only 10.5 percent of the nation's approximately 22 million veterans take advantage of this aspect of the Veterans Administration's benefits. When asked why, 33% of those surveyed said they were not aware of the benefit at all, while another group said they opted for the FHA loan because they thought it was "easier" to obtain.




Clearly, the VA could do a better job of educating (especially younger) service members, veterans, and unmarried surviving spouses about the VA home loan, and the mortgage industry could do a lot more to spread the word. So today, we're going to take a look at the program and learn why it might be the best loan product on the market.


Keep in mind that we are not VA, mortgage or financial experts, so you should consult the appropriate professional if you have any questions about the VA home loan program and its benefits.


VA Home Loan Program Basics

The VA Home Loan


Like the Federal Housing Administration (FHA) program, the U.S. Department of Veterans Affairs does not make loans, but does offer a guarantee to lenders if the veteran fails to repay the loan. If this happens, the VA will pay 40-50% of the loan balance (the percentage depends on the loan amount).


As you can imagine, this promise allows lenders to relax when faced with a borrower with less than perfect credit and below average income.


So what can you do with the VA home loan program?


Buy a home (or condo, if it's in a VA-approved community).

Build a home

Buy and reform a home

Buying land and/or a manufactured home


Is the VA loan harder to get than the FHA loan ?


No one really understands why so many military personnel and veterans think the FHA loan is easier to get. While there are additional steps to take to get a VA loan, they are quick and relatively easy (if you have the right lender).


To qualify, you must answer "yes" to at least one of the following questions:


1. Were you on active duty for at least 90 consecutive days during wartime?

2. Did you serve at least 181 days of active duty during peacetime ?

3. Have you served in the National Guard or Reserve for more than 6 years?

4. Are you the widow or widower of a service member who died in the line of duty or as a result of an active duty injury or disability?


Key Benefits of the VA Loan


As previously mentioned, the main advantage of the VA home loan is that you do not have to make a down payment. Now, any conventional or FHA-guaranteed loan for which a borrower submits a down payment of less than 20% will require the purchase of mortgage insurance (mortgage insurance premium in the case of an FHA loan and private mortgage insurance, or P.M.I., in the case of a conventional loan).


These policies cover the lender in the event of default by the borrower. This insurance, which benefits the lender in the event of a borrower default, can add a significant amount to your monthly mortgage payment. For example, the annual FHA mortgage insurance premium for a 30-year fixed rate mortgage with a 3.5% down payment is 0.85% per year.


The VA home loan has no monthly mortgage insurance premiums, limited closing costs, and no prepayment penalty. Because there is no monthly mortgage insurance premium, the veteran's monthly payment will be lower than if he or she had obtained an FHA loan.


The VA Home Loan Process


Yes, there are a few more hoops to jump through when dealing with the VA. However, the eligibility requirements are very similar to those for FHA and conventional loans:


- "Suitable credit." The VA doesn't really explain what they mean by "suitable."

- You must be able to prove that you have sufficient income to cover all your bills and the house payment.

- You must live in the house (you cannot rent it).

- You must submit a VA Certificate of Eligibility (C.O.E.). Most VA approved lenders can access your C.O.E. online or on the eBenefits.com page of the VA website.


The biggest hurdle for veterans is that these loans are provided by the lenders and they all have their own guidelines. Shop around until you find one you think you can work with.


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