VA Mortgage Program: Use Your Benefit Again And Again
Active-duty and retired U.S. military veterans have access to one of the best loan programs in the market today.
Eligible servicepersons can buy a home with no down payment.
Many veteran home buyers believe they can only use this VA benefit once. But, they can re-use this attractive financing tool again and again, as long as they meet a few basic requirements.
Eligibility for VA Loans
Eligibility standards for a VA loan are not particularly tight. The VA wants to help as many military borrowers as possible qualify for the program.
The basic requirement is U.S. military service. This includes veterans who received anything other than a dishonorable discharge, as well as active-duty service members and surviving spouses.
Service must be for at least a minimum period of time. The specific requirement varies, depending on whether service occurred during peace or war, and which conflict.
Veterans who served during wars before and during the Vietnam War must show 90 days of active service. Peacetime service generally requires 181 days of active service.
The minimum service requirements don’t apply to service-disabled veterans.
Spouses of veterans, including those who remarry after age 57, may also be eligible. So may those who serve in the National Guard and Reserves, and Air Force, Coast Guard, and military cadets.
Non-military officers of the National Oceanic & Atmospheric Administration and the public health service may also be eligible.
Being Certified As Eligible For A VA Loan
VA has an online eligibility certification process. The process can also be handled by mail through a regional VA service center.
It’s not necessary for individual veterans to go through the online or mail-in certification process, however.
Most mortgage lenders have access to a web-based system that lets them establish eligibility and obtain a certificate of eligibility in just seconds.
Re-Using VA Loan Benefits
Many veterans use VA loans for their first home purchase. However, they can keep using their VA loan benefit as they relocate or move up to a more expensive home.
If a borrower has sold the property and paid off the VA loan, eligibility can normally be regained. Then the borrower can obtain a new VA loan.
There is an exception for someone who has paid off the loan and still owns the property. In this case, a veteran can obtain a new VA loan, but it is only a one-time exception.
Otherwise, all an eligible veteran needs to get a new VA loan is proof that the first and any subsequent loans have been paid off. It can be re-used over and over.
Eligibility Gives Access To A Variety Of VA Loans
VA loans can be used for purchasing a home that will be occupied by the veteran. For active-duty military, the home may be occupied by a spouse or dependent.
VA loans can also be used for cash-out refinance loans. These are handled similarly to purchase loans.
Borrowers can get a streamline loan that will reduce the loan’s interest rate and payment. VA calls this an interest rate reduction refinance loan, or IRRRL.
The IRRRL or streamline loan is for existing VA loan borrowers to exchange their loan for a new VA loan with a lower interest rate.
A streamline loan is a faster, easier way to get a lower payment compared to other forms of financing.
VA’s Attractive Qualification and Terms
As with any loan, a borrower must show adequate income to make the payment. VA loans don’t require borrowers to have credit histories and credit scores as good as other borrowers, however.
VA loans generally carry below-market interest rates, because VA guarantees repayment of part of the loan.
Lower interest means lower payments and lower income requirements for borrowers.
The VA loan program is one of the best home financing options. Many people with current or former military service are eligible, as well as their spouses and some non-military service members.
VA advises anyone who thinks they might be eligible contact a mortgage lender to ask about a certificate of eligibility application.
Eligibility can be checked in seconds, and the result may be a much more financially attractive home purchase or refinance.
Best of all, the VA loan program is a gift that keeps on giving. If you’ve borrowed with VA once, you can probably do so again.
Check with your lender about today’s mortgage rates and eligibility to take advantage of this attractive home financing program.