Unlocking the Benefits: What to Know About VA Loans

Estimated reading time: 3 minutes

VA loans exist to make homeownership accessible and affordable for Veterans, service members, and surviving spouses. The program has helped millions of Americans secure home financing since its creation in 1944. As an approved VA Lender, McGlone Mortgage has provided VA loans to countless of clients throughout our history. To learn more about why we believe in this program so strongly, let’s explore seven things you should know about VA loans.

1. VA loans have no monthly mortgage insurance and require no down payment.

Conventional loans can be as little as 3% down payment, but in most cases have Private Mortgage Insurance (PMI). VA loans have a funding fee instead of required mortgage insurance. This fee goes directly to the Department of Veterans Affairs and help to cover lenders’ losses. If a borrower defaults, the VA steps in to pay off a portion of the loan.

2. There is a possibility to waive the funding fee for certain groups.

Not everyone is required to pay the VA funding fee, although a borrower must put in an application to be Funding Fee Exempt. Your Loan Originator can assist in this process and will be notified when your exemption is approved.

The people exempt from VA funding fees are:

• Veterans who have service-related disabilities rated 10% or greater, as determined by the VA.
• Veterans who are eligible to receive compensation because of pre-discharge disability examination and rating, as determined by the VA.
• Veterans who receive compensation for service-related disabilities if they didn’t receive retirement pay.
• Surviving spouses of military members who died on duty or died from service-related disabilities, as determined by the VA.
• Recipients of the Purple Heart.

3. VA loans are more credit flexible than other loans.

Since the Department of Veterans Affairs only oversees the loan program and does not issue loans, the agency doesn’t set or enforce credit score minimums. Credit score cutoffs for loans can vary, but the minimums for VA loans are typically lower than what borrowers need for conventional mortgages.

4. A person can use the VA benefit as often as needed.

Also known as a Lifetime Benefit, Veterans who qualify for a VA loan can use the program repeatedly for the rest of their life. If you’re ready to sell a home and have paid off the loan in full, a VA borrower has their full entitlement restored and available for another purchase.

5. A person can take out more than one VA loan at the same time.

Those that qualify can take out more than one VA loan at the same time as long as their entitlement remains. Each VA member has a specific amount of money they’re “entitled” to through VA loans. Not all VA members use 100% their entitlement when they purchase a home. If you still have entitlement left over, you can take out a second VA loan at the same time after completing your application process again. If you’re planning on using more than one VA loan at a time, it’s important to keep occupancy requirements in mind. Be sure to speak with a Loan Originator that has familiar experience with this type of situation.

6. Eligibility is up to VA Entitlement.

Veterans with their full VA loan entitlement can borrow as much as they qualify for, and their lender is willing to extend. The VA loan limits only affect borrowers with less than their full entitlement.

7. VA loans offer competitive rates.

VA loans have had the lowest average fixed interest rate on the market for more than five years in a row, according to data from Ellie Mae. VA loan rates are set by private lenders.

8. An eligible veteran may qualify for more than just government programs.

Veterans in some regional areas may have access to an additional financing option, providing them with conventional loan benefits. Borrowers must be eligible for traditional VA financing, as evidenced by their Certificate of Eligibility. Speak with your Loan Originator to find out if you qualify!

The VA loan provides a number of one-of-a-kind benefits for active-duty members, Veterans, and surviving spouses. To learn more about our VA loan program, contact us today. You’ll be put in touch with a Loan Originator who will walk you through each unique part of the process and ensure your mortgage success.