The Benefits of a VA Loan

VA guaranteed home loans are made by private lending, institutions, such as a mortgage company, savings and loan, credit union or bank. So what is the big deal about an VA loan when they are go through the same process as other loans....or do they?

 Unfortunately for the average consumer, we do not enjoy half the benefits of a VA loan. For example, the VA guaranty on the loan protects the lender if the payments are not made. It is intended to encourage lenders to offer veterans loans with more favorable terms such as no down payment. The amount of the guaranty depends on the loan amount and whether the veteran used some entitlement previously. The VA guaranty amount varies with the size of the loan and the location of the property. Two married veterans who have never used the Certificate of Eligibility, are not entitled to a double guaranty or loan amount. The same loan amounts and guaranty percentages apply.

The VA guaranteed loan can be used to buy a house, condominium in a VA approved project, an cooperative unit (co-op) in a VA approved project, to build a home using a VA approved builder, improve a home by installing energy efficient features, refinance an existing home up to 100 percent of the VA established value or refinance an existing VA loan to reduce the interest rate, and finally to buy a manufactured home and or lot.

After all those possibilities and options of using a VA loan, there are still more benefits to enjoy! Here are some of the benefits they have that we as consumers do not;

1. NO down payment (unless required by the lender and that is because the price more than the reasonable value of the property determined by the VA).

2. Negotiable fixed interest rate competitive with conventional mortgage interest rates.

3. The Buyer is informed of the estimated reasonable value of the property (Notice of Value (NOV)..

4. Limitations on closing costs.

5. No income or asset limits.

6. VA mortgages are assumable.

7. Not limited to first time buyers.

8. The benefit can be used again.

9. Forbearance extended to VA homeowners experiencing temporary difficulty.

10.No income or asset limits.

These are some of the benefits the VA loans have to offer for our men and women in the Armed Forces. Sounds tempting enough to join...? 

The starting process of VA loans

There are some many types of loans on the market for first time home buyers, and the seasoned ones alike, however, the VA loans are the only loans that are not given to consumers freely; you have to serve this country in Armed Forces.
   The National Association of Realtors saw the need to bring more to the community of people serving in the Armed Forces by implementing a certification class called H.O.M.E.S. It means, Housing Our Military with Excellent Service. In today's world of technology and social media, somethings will always remain the same; the government requires a lot of paperwork and proper documentation to get all services rendered under their governmental programs.
  It holds true especially for the VA loans, the military must have all things in order before the process can  begin. Military people want to work with real estate agents who are willing to go the extra mile while waiting for their due diligence on both sides of the equation; the military member and the Bank Loan office.  That is why it is important to know the process to get started with the military member and or family from the beginning to obtain an loan approval. The military member need to have DDT forms which are given when they leave active duty and are necessary to receive the Certificate of Eligibility for VA loans.
   The eligible veteran must also meet credit and income requirements in order to qualify for a VA- guaranteed loan. The COE or Certificate of Eligibility is the only reliable proof of eligibility for the lender. We as real estate agents also have to be aware of one important factor: NOT ALL veterans are in the military and NOT EVERYONE in the military is a veteran.
   When the program called the Automatic Certificate of Eligibility (ACE) program is used, it enters basic identifying information for the veteran into an automated certificate program and the system generates a certificate, which the lender may download and print. If the program is unable to issue a certificate, it does not mean the veteran is not eligible, only that the program does not have sufficient information.
   Finally, if the veteran is unable to to received the certificate in this program or when his entitlement must be restored, a veteran can request it from VA, by submitting VA Form 26-1880, Request for Certificate of Eligibility along with evidence of service to:
                                                                Winston-Salem Eligibility Center
                                                                 P.O. Box20729, Winston- Salem, NC 27120

This is the starting process of receiving a VA Loan.