Everything America’s military veterans need to know

By Sonny Shrivastava

Homes for veteransThe process of qualifying for a mortgage and buying a house is complicated enough. What's this VA loan thing? If you know the basics and find a lender who’s knowledgeable, it can be the greatest thing since sliced bread. Did you know that in 2018, 610,512 VA loans were made with an average loan amount of $264,197? The VA was responsible for $161.3 billion in mortgages last year.

What is a VA loan?

A VA loan is a mortgage made by private lenders that is financially guaranteed by the Department of Veterans Affairs. There are no limits on how much you can borrow, but there are limits on how much the VA will guarantee. Some of the biggest benefits of VA loans is that they offer 100% loans with lower interest rates than traditional financing.

You may only use VA loans for a primary residence, which is the home where you live. You cannot finance an investment property, vacation home, or second home with a VA loan. The main attraction of a VA mortgage is that it is easier to get financing by offering zero down-payment loans with more lenient credit and income requirements than conventional mortgages.

What are VA loan eligibility requirements?

Most members of the military, veterans, reservists and National Guard are eligible to apply for a VA loan. Spouses of military members who died while on active duty or as a result of a service-connected disability also can apply. Active-duty military personnel qualify after six months of service. Reservists and members of the National Guard must wait six years, but if they are called to active duty before that, they receive eligibility after 181 days of service.

You might qualify if you:

  • Served 90+ consecutive days of active service during wartime
  • Served 181+ days of active service during peacetime
  • Were an active member of the National Guard or Reserves for 6+ years
  • Are married to a service member who died in the line of duty or as a result of a service-related disability

Even though you may be eligible to apply for a VA loan, you still have to meet lender requirements which include income and employment verification, credit qualification, tax returns, and debt-to-income ratio.

Do VA loans require PMI?

Unlike other loans where you are putting down less than 20%, a VA loan does not require private mortgage insurance.  Federal Housing Administration (FHA) loans and conventional loans with less than 20% down require PMI. This can add a couple of hundred dollars per month to your payment and can end up costing you thousands over the life of the loan.

This translates into significant monthly savings for VA borrowers. For example, a borrower who makes a 3.5% down payment on a $200,000 FHA-insured mortgage would pay $100/mo for mortgage insurance alone.

Sonny in Arizona Can Help!

In such a competitive market, it's important to have the most updated information at your fingertips and the most experienced Realtor® at your side. This month alone I sold three homes for veterans and found one family their perfect forever home! Contact Sonny today or call (623) 824-4275. Let me help you get that VA loan!