VA Mortgage: Significance, Eligibility Criteria and Service Requirement

VA mortgage

A VA home loan is one of the best ways to fulfill the dream of buying a home for military personnel and veterans in the U.S. The Department of Veterans Affairs provides several facilities to such groups of people to help them get their abode.      

Military persons, veterans, and a certain class of other people can apply for a VA loan easily without the need for mortgage insurance, down payment, and flexible mortgage terms. 

Here are the most significant and important factors of a VA loan:

No Down Payment

A home aspirant has to pay some money as a down payment while applying for a home loan. 

The percentage of such payment can vary according to the cost of a home and financial status of a person. 

However, in the case of a VA loan, a military man or veteran needs not to pay any down payment while applying for the same. 

This becomes possible due to the financial support to the lenders by the U.S government. 

No mortgage insurance

Generally, a person has to pay for mortgage insurance in case he/she makes a down payment below 20% while applying for a house loan. 

This insurance is also known as a mortgage insurance premium that protects a lender from loss in case of an applicant’s default. 

But, a VA loan applicant need not pay for such insurance in any case. This makes VA loans a very affordable option for a home aspirant.      

Financial support by the federal government

After applying for a conventional loan or FHA mortgage, a person needs to pay installments regularly. 

But, in the case of a VA loan, the federal government backs a lender if someone fails to pay a portion of installment. 

Due to this financial support of the government, lenders can offer a VA mortgage with various attractive terms to the suitable candidates. 

Liberty to choose suitable VA loan rates     

VA loans are provided by loan institutions, individual lenders, credit unions, and banks. They all decide their fees and rates for this mortgage. 

A petitioner can check these different rates and can choose one that suits his financial status. 

A person can also go to some reputed authorized website of a VA lender and check the offered rates. 

It is also good to compare their rates with the ongoing other mortgage rates in the market.       

No prepayment penalty 

There are circumstances when VA loan candidates do not want to own a home anymore. 

In such a case, if they leave and want to sell their home before a certain period, there is no prepayment penalty or any charges. 

Additionally, a person can also refinance an existing VA mortgage to another VA or non-VA loan anytime.       

Various varieties and benefits

A VA loan is available with various options and benefits. People can choose a fixed rate, adjustable rate, or other sorts of VA mortgages according to their specific needs and goals. 

They can use it to purchase a  manufactured abode, condo, duplex, or any other types of property. 

The finances can also be used to repair a house, refinancing an existing loan or such other purposes. 

Use this tool to find out how much the different 20 year mortgage options will cost you. 

Flexible rules and guidelines

Similar to other mortgages, VA loans also have certain conditions such as good credit history, balanced income to debt ratio, and many other rules that a home aspirant needs to follow. 

However, in the case of a VA loan, rules are more flexible and simple. This becomes possible due to the financial guarantee provided by the Department of Veterans Affairs.      

Low closing cost

Another good factor of the VA loan is the low closing cost charged by a lender from a VA loan candidate. 

This not only makes the mortgage easily affordable but also helps a borrower avoid facing any financial difficulty in the future. 

Flexibility in the matter of funding fees

In some cases of a VA loan, funding fees or upfront cost is essential to pay. The amount of it depends upon the type of loan, down payment, total mortgage amount, and other factors. 

VA loan aspirants need not pay these fees in cash as VA arranges to finance it with their actual mortgage.      

Assumable Feature

VA loan is also assumable. It means if a person wants to transfer his/her VA mortgage amount to some other home aspirant in the future, he/she can do so. But that person should also be an eligible VA mortgage candidate. 

This feature proves exceptionally useful when the rates of a loan rise high, at that time a borrower can shift the loan to another eligible candidate to avoid financial crises.      

Eligibility for VA mortgage

To acquire a VA loan, an aspirant needs to meet some conditions or eligibility criteria. For this, a candidate should possess one of the following qualifications: 

  1. A Reservist  
  2. Cadet at the Air Force, Military, or Coast Guard Academy of the United States. 
  3. Serviceman at Active-duty 
  4. A midshipman at the Naval Academy of the U.S.  
  5. Survived spouse of a veteran
  6. A National Guard member
  7. An officer at the National Oceanic and Atmospheric Administration

A VA loan aspirant must also meet one of the following minimum service requirements:  

  1. 181 days of active service at the time of peace 
  2. 90 days of active service at the time of war
  3. 6 years service in the Reserves or National Guard 
  4. A spouse (who is not remarried) of military personnel died during duty   

In addition to these qualifications, a VA mortgage aspirant should also possess satisfactory credit scores, stable income, and a good debt-income ratio to qualify for the same. 

The eligibility of a qualified VA loan aspirant does not expire. A person, who has already utilized VA loan benefits can again take advantage of them anytime.       

If you feel you are eligible for this loan, check the number of different available lenders in the market. Compare their rates and other conditions to apply for VA mortgage.

Choose the fees and rates that best suit your mortgage goals. Make sure the lender you select is authorized by the US government to avoid any troubles in the future.     


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