Buying a new home is a huge investment – not only financially, but emotionally as well. It can be a thrilling experience, but also a trying process that does not always work out as planned. The US Department of Veterans Affairs is well aware of this and has made the loan process simpler and more affordable for veterans, active duty military personnel, and their families.
The very first VA loans were part of the comprehensive GI Bill that was signed into action in 1944. Under the law, the VA was given the authority to guarantee the loan for a home, farm, or business to veterans or their surviving spouses with no down payment. The zero-down feature of the law was designed to provide assistance to millions of veterans who might not have otherwise been able to become homeowners. The law also made it possible for veterans to buy homes in small, rural towns where private funding was not available. Of the many benefits extended in 1944, VA loans have been one of the most beneficial to the welfare of veterans and their families. Since 1944 over 18 million veterans have taken advantage of this bill and made homeownership a reality.
Today, qualifying veterans can get a get a loan issued by a private lender such as a bank, savings & loans, or mortgage companies, and have them guaranteed by the VA. This means no down payment is necessary, and monthly payments are lowered because there is no need for Premium Mortgage Insurance. The repayment terms are also favorable to the borrower, whether they choose a traditional fixed, growing equity mortgage, graduated payment mortgage or an adjustable rate mortgage. Each plan has low interest rates, and with the adjustable mortgages, the change is limited to 1% annually and does not exceed 5% over the lifetime of the mortgage. The VA has also made it incredibly easy to refinance with an IRRRL, which is also known as VA Streamline refinancing because of the quick, paperless process involved with obtaining a new mortgage.
Having a VA loan is incredibly beneficial for many reasons. If you are a qualified veteran looking to be a first time homeowner, this is a great way to go. Make sure you contact the VA to make sure you have all the necessary paperwork for obtaining a VA guaranteed loan. You will also want to sit down with your loan officer to go over any questions or concerns you have to make sure you have the most enjoyable, stress-free experience.