A VA loan is a mortgage loan that’s backed by the Department of Veterans Affairs (VA) for those who have served or are presently serving in the U.S. military. While the VA does not lend money for VA loans, it backs loans made by private lenders (banks, savings and loans, or mortgage companies) to veterans, active military personnel, and military spouses who qualify.
There are three types of VA loans: purchase loans, interest rate reduction refinance loans (or IRRRL, also referred to as a VA streamline refinance loan), and cash-out refinance loans. There are many benefits to a VA loan, but one of biggest benefits is that no down payment is needed to purchase a home. This can make home ownership a reality for active military or veterans who might otherwise not be able to afford it.
VA loans are designed for military personnel, veterans and military families. The list of those who are eligible for this home-buying military benefit include:
- Active-duty personnel
- Reserve members
- National Guard members
- Some surviving spouses
You must also have suitable credit (here are 5 ways to improve your credit score), sufficient income and a valid Certificate of Eligibility (COE). And you must use the home for your own personal occupancy.
The VA loan program offers some of the most attractive and flexible home loans available, and they are exclusively for military personnel, veterans and their families. Perhaps the two biggest benefits that make these loans more affordable than a typical home loan are that the borrower normally does not need to make a down payment, and there is no private mortgage insurance (PMI) requirement.
According to the VA there is “no maximum that an eligible veteran may borrow using a VA-guaranteed loan.” However, there are county limits that must be used to calculate the VA’s maximum guaranty amount for a particular county. In other words, there’s no limit to how much you can spend on your new home with a VA loan, but the VA has limits on how much liability it will assume, which can affect the amount of money your lender will let you borrow.
Generally, eligible veterans or military personnel can get loans up to $417,000 with no money down. Check with Marine Bank to see how you may qualify for a VA loan and take advantage of our Project Homefront program and $500 off your closing costs.
If you're in the process of looking for a new home, here is some helpful information for home buyers that offers a better understanding of how the process works so you can choose the best options for you and your financial situation.