If you are a current service member or veteran, there are mortgages specifically designed to help you buy a home, known as VA loans. With a VA home loan, you can purchase or refinance a home with no down payment.
If you qualify for a VA home loan, you can enjoy many benefits, like no longer having to wait to purchase your dream home while you save up afor a down payment and having access to lower interest rates. Griffin Funding is proud to help service members and veterans find the right mortgage solution for their needs.
A VA loan is a mortgage that is backed by the Department of Veteran Affairs, commonly referred to as the “VA”. VA home loans originated in 1944 as part of the original Servicemen’s Readjustment Act, also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to offer housing and assistance to veterans and their families, making the dream of home ownership a reality for millions of veterans.
There are many benefits to pursuing a VA home loan as opposed to a traditional mortgage. Primarily, VA home loans:
Since VA home loans do not require monthly mortgage insurance (MI) and offer more favorable terms, they are usually more affordable. As such, borrowers are better able to focus on paying off debt and other financial obligations.
VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home. The Department of Veteran Affairs guarantees a portion of the home loan. This guarantee acts as an alternative to the traditional down payment, which is typically required to help protect the lender if a borrower defaults on the loan. This guarantee is also known as an entitlement, which works as a substitute for a down payment.
There are two parts to the VA entitlement:
Generally speaking, the maximum amount for a VA loan varies per each borrower’s circumstances. The VA does not limit the maximum amount you can borrow for a VA home loan. However, there may be a limit on how high of a loan you can qualify for without a down payment. These limits are based on your entitlement:
Typically, you can borrow up to four times your entitlement amount. When both the basic entitlement and bonus entitlement are utilized, you can qualify for a loan of $484,350, or in some cases, more. While these amounts are standardized, the loan limit and entitlements may be greater in high-cost areas. To determine the maximum amount you can use a VA loan for, you need to look at the 2020 loan limit for the county you plan to purchase in, while considering the above factors.
There is also the Blue Water Navy Vietnam Veterans Act of 2019 to consider, which has authorized changes to VA home loans as of January 1, 2020. Under the Act, qualifying veterans can now purchase a home valued up to $1,500,000 with zero down payment.
For all qualifying VA home loan applications moving forward, the following will apply:
To learn more about this legislation and how it can impact your VA loan, review the VA’s page that covers the changes to benefits.
Keep in mind that if you live in a county with low housing costs and do not need to use the entirety of your entitlement, you can use it toward your next down payment if you sell this home and move. Since VA loan limits change, it can be difficult to be fully informed. Our knowledgeable loan officers can provide further clarification on how VA home loans work.
With the added security of backing from the Department of Veteran Affairs, interest rates on VA loan rates are typically lower than those for other types of home loans. When it comes to understanding your interest rate on your VA loan, there are a few key points to keep in mind:
United Executives offers competitive interest rates that can help you save money over the course of your loan.
There is no limit to the number of times you can use a VA loan entitlement. If you qualify for the VA loan program, it is a life-long benefit that you will be able to enjoy. That said, there are some stipulations for using your VA loan. As mentioned above, you typically need to restore your entitlement before you can use it for another VA home loan—meaning you pay off the remaining balance of your mortgage.
However, there is an exception that allows you to have two VA home loans at the same time—reassignment. If you are required to relocate for PCS, you may be able to retain your primary residence that the original VA loan was used for and use the remaining entitlement to purchase a residence in the new location.
While this is the most basic criteria, there are a variety of additional VA home loan requirements regarding both applicants and the desired property. Delve deeper by reviewing our full breakdown of VA loan eligibility.
Determining whether a VA home loan is worthwhile depends on your individual circumstances. As with all home-buying decisions, committing to a mortgage is a personal decision.
That said, both the short-term and long-term VA home loan benefits cannot be understated. From having more available income to afford current expenses, to being able to pay off debt and increase savings over the course of the loan, you are likely to be in a much better financial position if you secure a VA home loan or VA refinance loan with Griffin Funding.
At Griffin Funding, we provide several types of VA loans including:
A VA purchase loan is the type of loan you would want to use if you’re buying a new home. These loans are typically ideal for qualifying veterans or service members because they can help you purchase a home with better terms—especially if you’re having trouble finding other financing options.
A VA cash-out refinance loan gives qualified veterans the opportunity to refinance their conventional or VA loan into a lower rate while extracting cash from the home’s equity. A VA cash-out refinance loan replaces your existing mortgage instead of complementing it. Qualified homeowners can choose to refinance up to 90 percent of their home’s value for mortgage debt, or refinance a lower percentage and use the cash to cover debt payments and other needs. Refinancing up to 100 percent of the home’s value is available at higher interest rates.
A VA streamline refinance loan, or interest rate reduction refinance loan (IRRRL), is one of the best options for homeowners who already have a VA Loan and would like to refinance into a lower monthly mortgage rate. This refinance type is relatively easy and can be completed quickly, due to the fact that homeowners are refinancing from one VA Loan product to another. With this type of refinance, there are several prominent advantages, including no required appraisal in some cases, no pest inspection, no income qualification, no need to obtain another Certificate of Eligibility, and little to no out-of-pocket costs.
A home refinance loan can not only improve your current rate and terms, but can give you a chance to change the type of loan you are in, increasing your loan payoff time.
Refinancing your home loan enables you to replace your existing home loan with a new home loan that features better terms while giving you the opportunity to get cash back from the equity you have built in your home. Using the equity in your home is a powerful way to help you improve your overall financial well-being and pay off high-interest loans, debts, and credit cards.
It can seem overwhelming trying to figure out how to get a VA home loan, however, the process is fairly straightforward:
At Griffin Funding, it is our goal to complete all of these steps within 30 days or less.
Griffin Funding lends VA loans in several states to help service members and veterans find a home in their ideal location. Learn more about VA home loans in your desired state of residence:
Our team can help you understand the requirements and specifications of VA loans in these regions.
It’s important that you have a thorough understanding of VA home loans before moving forward with your application. For more info on Griffin Funding VA loans, speak with one of our loan specialists who will be happy to provide clarity, or you can use the following resources:
Ready to apply for a VA purchase or refinance loan? Submit an application online or speak with a loan officer today by calling (855) 394-8288. At Griffin Funding, we consider it a privilege to serve veterans and look forward to helping you find the right VA loan for your needs.
Please enter your username or email address. You will receive a link to create a new password via email.