We all know that most of us need a mortgage to buy a house. We go to a lender and fill out all the necessary paperwork, then we can buy the house, paying back the mortgage money loaned to us in monthly installments.
A VA loan is then a mortgage guaranteed by the US government and intended for use by US veterinarians, military personnel, currently serving members, and certain surviving spouses of members. Veterans can then use this mortgage to purchase a single family home or condominium, multi-unit properties, manufactured homes, or new construction property.
Although it is the office of Veterans Affairs that financially guarantees eligible loans and sets the rules for who can qualify and when, and sets the guidelines, the money does not actually come from the government, but rather from any lender eligible (bank or other financial institution).
The intent of these VA loans is to provide financing for a home for service members and their families without worrying about having to make a down payment like you do with other mortgages. If you don’t have to provide a down payment, more of your money can be used to pay off the mortgage and that’s the idea of the loan.
The original law was passed by Congress in 1944, after World War II, and since then more than 20 million VA home loans have been issued. After some modifications over the years, the program has been expanded and increased to allow more service members to qualify and to include more housing options for those members.
If you qualify for a VA loan, you are eligible for 103.3% financing without private mortgage insurance, which is a significant savings over a traditional mortgage. You can also get 20% for a second mortgage and up to $6,000 for energy-efficient home improvements. Plus, VA financing fees of between 0 and 3.3% can be added, again, much better than a traditional mortgage.
Being in the military isn’t an easy job, and it’s good to know that once you’re a veteran, there’s help financing your property. Whether you’re still on duty, proud vet to the wife of a deceased hero, the government gives you advantages when it comes to financing your home.
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