A complete guide to the VA home loans program

The Department of Veterans Affair of the United States of America guarantees a mortgage loan in the United States of America which is known as the VA loan. This program is meant to benefit the veterans; members of the military, who are still serving their duties in the country’s military force; separated service members; the surviving spouses; and selected reservists. It can be used to purchase single family homes, multi-unit properties, condominium, new constructions, and manufactured homes. The VA formulates rules in terms of who can qualify for the mortgage loan, guidelines and requirements of the mortgage loans, and financially guarantees loans that come under this program.

What is the VA Cash-Out refinance Loan?

• The VA Cash-Out refinance Loan is meant for those homeowners who wish to take cash out of their home equity in order to manage other concerns like payment of debts, payment of school funds, or improving the home condition.

Who handles the VA home loan program?

• The entire VA home loan program is privately handled.
• The VA does not involve itself in the process of loan approval.

What is the VA home loan guaranty?

• Basically, the VA does not get involved in the loan approval process, it just stands behind as a guarantor for a portion of the loan.
• Due to an unpredictable event, if an individual is not able to make the payments to the lending institutions, the institution may send warnings for payment. In such a situation, the VA happens to be an insurance on behalf of the individuals to the qualified lender.

What are the advantages of the VA home loan guaranty?

• With the VA home loan program being an insurance for an individual to the lender, the lender uses this opportunity to offer the individuals with some more benefits. As long as the sales price do not exceed the appraisal value the down payment is not needed to be made. There is no requirement for private mortgage insurance premiums. As per the VA rules, the closing cost charges applied to an individual are limited; however, these closing costs are anyhow paid by the seller. If the individual pays off the loan earlier than planned, the lender cannot charge a penalty on the individual. The VA provides advice to the individual for tackling a situation wherein he/she is unable to or is delayed in making a payment.
• The VA home loan program guaranty advantages can be reused.
• To use the benefits offered by the VA home loan guaranty one does not require to be a first-time buyer of homes.

What is required for an individual to be eligible for the VA home loan guaranty?

• An individual is required to have a valid certificate of eligibility, sufficient income, and a satisfactory credit to be able to qualify for a VA home loan guaranty.
• The concerned home that is going to be purchased by the individual is supposed to be for the person’s personal occupancy.

For what all purposes can a VA home loan be used?

The eligible person can use the VA home loan for any of the following purposes:

• To construct a house.
• To purchase a condominium within the VA approved project.
• A house can be purchased and improvised simultaneously.
• Improvements can be brought about in the homes by way of installing energy-saving appliances and making the home an energy-efficient home.
• Buy a home that is meant for personal occupancy.
• Purchase a manufactured home.
• Refinancing either a loan that is guaranteed by the VA or direct loan in order to attain a lower rate of interest.
• Refinancing the mortgage loan which is in existence or any other indebtedness that has been secured by the lien of record on the house occupied and owned by the veterans.