Using Veteran VA Loan Benefits
Making The Most Of Your VA Loan Benefits
Among the many benefits afforded to Veterans as a “thank you” for their service to the country, VA loan benefits are among the most popular. After years of following orders and possibly having to live in desolate destinations not of their own choosing, Veterans and even active duty personnel can purchase the home they want. The home is not free, but the loan terms for obtaining it offers many advantages to the Veteran.
Many people who can afford to pay the monthly cost on a home mortgage are stumped when it comes to saving the down payment. Among the VA home loan benefits is that the loan requires no money down. Unlike many buyers who can only offer minimal down payment on conventional and FHA loans, Veterans do not have to compensate by paying costly Private Mortgage Insurance (PMI). You also receive a low interest rate based on current market values. Finally, you closing costs are low and are often paid by the seller or the VA.
Who Is Eligible For VA Loan Benefits?
To receive these VA loan benefits, you must meet the requirements for service. Those currently on active duty must have served for 90 continuous days, while Veterans must have served for 181 continuous days in peace time or 90 days in wartime. If you were in the National Guard or the Reserves, you must have served for six years.
You are even eligible for VA loan benefits if you are the surviving spouse of a service person missing in action, assigned to a prisoner of war camp, or killed or disabled due to service related causes. If you have been discharged early due to hardship, the convenience of the government, reduction in force, certain medical conditions, or service related disability, you may qualify too.
To start the process of establishing your eligibility for VA loan benefits, you must obtain a proof of service (DD 214) and a Certificate of Eligibility (COE) by directly applying to the government or by working through an approved lender such as Capital Bank, N.A.. We can usually obtain your COE immediately, as long as your records are in the VA system.
What Type Of Home Can You Choose?
When you are choosing your home, you have the freedom to:
- Buy a home or condominium unit in a VA approved project
- Build a new home
- 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.
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.
How To Access Your VA Loan Benefits
Once you have obtained your COE, you should apply online to get prequalified for a specific loan amount. Regardless of loan limits, a lender will only offer you a loan in line with your income and credit history. Capital Bank, N.A. is rooting for you to become a homeowner, but we can only lend you an amount you can comfortably repay.
At Capital Bank, N.A., we will guide you through the prequalification process and help you gather necessary documentation. Our staff of loan specialists is standing by to answer your questions, help you complete the application process, and offer support until you have the keys in your hand. Just contact us at (866) 216-3577.