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How Does VA Loan Work

10 Mar 2020

Veterans are important people in the United States. Their patriotism and bravery are worth the privileges the U.S government gives them. For instance, they are entitled to VA loans which attract 0% down payment. The idea of not making any down payment is a huge VA home loan benefit. However, that’s not all there is. Other advantages include lack of mortgage insurance, low closing costs not to mention that a military spouse can apply for the loan.

In short, today a veteran can own their dream home thanks to the VA loan program. However, this whole thing may seem far from reality especially if you don’t understand how VA loans work. We are about to dive into this.

VA Loan Overview

A simple overview of VA loans

A VA loan is a mortgage initiated by the U.S government in favor of the military and their spouses. The loan is guaranteed by the United States Department of Veterans Affairs. The loan is offered by private lenders.

So, if you are an active-duty military officer, veterans or in case you lost your spouse who was serving in the military, you can apply for VA home loan. VA loans were first introduced in 1944. Today, they are very popular since the process is easy and the terms are reasonable.

How the VA loan works

VA home loan is non-conventional. They are only available to military families and veterans. So, they are somehow different from regular mortgage issued by banks as they are backed up by the government. In other words, the government can repay a part of your home loan in case you default the loan or a case where you are likely to lose your home.

That said, VA loans have a lower risk, unlike conventional loans. Also, they are easily accessible. If you are eligible for a loan, you can start the application process. Ensure you have a COE (Certificate of Eligibility). This document is proof of your loan eligibility to your lender. If you do not have a COE, visit the VA website and apply for a certificate of Eligibility through your lender or mail.

How Can You Apply For a VA Home Loan?

Make sure that paperwork is in order before you start the process of applying for a loan through your private lender. Note that a competent vendor such as Resource  Financial Services, Inc will give you proper guidance throughout the process. Also, all the questions you may have will be answered.

There VA mortgage rates and loan terms are great. That way, you rest assured that you are settling on the best deal. Further, an expert will familiarize you with basic tips making things easier.

2020 VA home loans limits

Since 1st January 2020, militaries that applied for loans or want to apply for loans are not entitled to the VA loan limit. In other words, Veterans can access the loans with $0 down payment and guaranteed by the Department of Veteran affairs despite the price or part of the country.

All the same, this does not rule out, the possibility of a loan limit. This is because they are still applicable to veterans with over one existing VA loan. For VA loan defaulters, they have a partial entitlement.

Comments on this guide to US Veterans loans article are welcome.

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