Posted 04/09/2015

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What Is a VA Loan?

VA loans are home loans to consumers who have served or are presently serving in the U.S. military. While the Department of Veterans Affairs (VA) does not lend money for VA loans, it backs loans made by private lenders (banks, savings and loans, or mortgage companies) to veterans who qualify.

Who Is Eligible For a VA Loan?

  • Veterans
  • Active-duty personnel
  • Current or former Reservists/National Guard members
  • Some surviving spouses

What Are the Benefits of a VA Loan?

There are many, as taken directly from the Veterans Affairs site:

  • No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property).
  • Buyer informed of reasonable value.
  • Negotiable interest rate.
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation).
  • Closing costs are comparable with other financing types (and may be lower).
  • No mortgage insurance premiums.
  • An assumable mortgage.
  • Right to prepay without penalty.
  • For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
  • VA assistance to veteran borrowers in default due to temporary financial difficulty.

How Can Veterans Get VA Loans?

If you are a veteran, you can apply for a VA loan with any Mortgage Consultant at Mortgages Unlimited as we are a participant in the VA home loan program. You will need a Certificate of Eligibility from the VA to prove you are eligible for a VA loan. Keep in mind that the Certificate of Eligibility, while necessary, only allows an eligible individual to apply for a home loan; it does not guarantee a loan approval. You will also need sufficient income and suitable credit.

In order to obtain a VA home loan, you must first fill out VA Form 26-1880, the request for your Certificate of Eligibility.

http://www.military.com/Data/MIB/Finance/Content/Files/form_26-1880.pdf

There are more than 370,000 veterans across Minnesota. If you would like more information on getting approved for a VA loan, contact one of our Mortgage Consultants at Mortgages Unlimited.  

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