How To Use VA Loan Benefits
How To Use VA Loan Benefits and VA Loan Refinancing Benefits
The VA loan is one of the best benefits of being in the military. It’s something that’s earned through sacrifice and service, and Capital Bank, N.A. is here to help Veterans, service members and their families ensure that they get the best Veteran home loan available to them!
Using Your VA Loan
It’s easy to use your VA loan benefits. Homebuyers can use a Veteran mortgage on:
- Existing homes
- New construction homes
- First home purchases
- Second home purchases (provided the balance of your first Veteran loan has been paid in full)
- Buy a condominium unit in a VA approved project (the condo must meet qualifications set by the VA)
- Simultaneously buy and renovate a home
- Improve a home by installing energy-efficient features
- Buy a manufactured home and lot
Whatever type of home you buy, you must plan on occupying it. You can only use VA loan benefits on your primary residence, not second homes, vacation homes, investment properties, etc.
Whatever home you buy must be in line with your eligibility and with federal loan limits. The VA grants you a basic entitlement of $36,000 plus an extended amount of $68,250 if your mortgage exceeds $144,000. The VA guarantees 25% of a mortgage up to $424,100; if you buy a home that exceeds the loan limit or that does not appraise for the selling price, you must pay out of pocket or have the balance finance without the benefit of the VA guarantee.
First Time Homebuyer? No Problem With VA Mortgages
If you’re a Veteran and a first time homebuyer, you might be feeling a little lost when it comes to using your VA loan benefits. At Capital Bank, N.A., we’re dedicated to helping Veterans and their families buy their first home and use the Veteran home loan benefits that they’re entitled to.
As a first time homebuyer, we know you’ll have questions and that’s why we have a team of local experts standing by who are experienced in how Veteran loans work. Contact us at (866) 216-3577 or [email protected] and we may be able to help you throughout the entire process of Veteran mortgages.
How Many Times Can You Use Your VA Loan Benefits?
While you can usually only have one VA loan at a time, you can use your VA loan benefits on successive homes you buy. There are a few exceptions. For the complex rules regarding buying a home before you have sold another, letting others assume your loan or using remaining eligibility on additional loans, consult the specialists at Capital Bank, N.A..
Every time you buy, you have to pay a slight fee comparable to 2.5% the first time you use the program and 3% in future times. The VA may waive this fee in certain circumstances, but this small payment is in place to lessen the burden on taxpayers.
Veterans, Know What Your Purchase Agreement States
The purchase agreement for your new home is a legally binding document. Before you sign the purchase agreement for your home and your VA loan, make sure it includes things like:
- The exact purchase price of the home.
- Whether the buyer or seller is paying closing costs. The VA allows sellers to pay closing costs, which can help reduce your out of pocket costs even more.
- How much your down payment, if any, will be
- If you or the seller can back out of the sale.
- The closing date, as well as who is responsible for damages after closing, but before the seller moves out of the property.
VA Appraisals Help You Make Good Buying Decisions
The Veterans Administration also helps you in other lesser-known ways. For example, the VA appraises the house you wish to purchase to make sure that you are not overpaying in the current market. If your house appraises low and you want to go ahead despite the VA appraisal, you have to come up with the money for the difference between the appraised value and the selling price. The appraisal does not guarantee that the house is in good condition though; you still need to request a home inspection to uncover potential problems the house may have.
If you are buying a newly built home, the VA requires inspections to make sure that your house meets accepted construction standards and conforms to the plans and specifications noted in the VA appraisal. The VA does not supervise construction of your home, promise that the house is free of defects, or act as your lawyer in case of disputes with the builder.
VA Caps On Closing Costs
As with any loan, the mortgage loan you claim under your VA home loan benefits will have closing costs. The VA, however, does limit your charges to what is “reasonable” and “customary” in your local area. The remaining charges are paid by the seller or the lender. If you have little cash to apply toward closing costs, you can request that the seller pay some or all of your costs of to the limit allowed by law. You can also agree on a selling price that includes some of the costs, which usually means that you have increased your offer on the house to include the amount of charges you have to pay at closing.
Your VA home loan benefits allow you to purchase a home at a fair market price without coming up with much cash out-of-pocket. This is a great benefit if you are a first-time buyer who has not been able to save toward the purchase of a home while you were in the military.
What About Veteran Loan Refinancing?
If you’ve already purchased a home using a conventional mortgage, FHA loan or even a VA loan, Capital Bank, N.A. can help reduce your monthly payment using Veteran mortgage refinancing. We can help you determine whether a cash-out refinance or a streamline refinance is right for you.
Combine Your Veteran Home Loan With An Energy Efficient Mortgage
An energy efficient mortgage (EEM) gives homeowners much needed cash (up to $6,000) to make updates that can make their home more energy efficient. Homeowners can:
- Replace windows and doors with energy efficient models
- Increase insulation
- Seal air leaks around windows, doors and ducts
- Install a programmable thermostat
- Install a new HVAC system
- Install an efficient tankless hot water heater
Applying For Your Veteran Home Loan
Applying for Veteran mortgages is easy. Simply fill out our simple VA loan prequalification form and a local expert from Capital Bank, N.A. will contact you to help you throughout the process. Don’t miss out on your benefits — let us help you buy a new home today!