Home Loan program of the US Department of Veterans Affairs via its Loan Guaranty Services provide guarantees for qualifying veterans so that they can get a VA finance guaranty. The program is intended to help veterans buy and retain a home by making the loan approval process easier by helping reduce costs and other requirements more manageable. Qualified VA lenders often provide basic information about the processes and requirements behind VA Loans before calculating the maximum loan available to the veteran.
Basic VA Loan Concepts
VA Loans work for the veteran by guaranteeing the loan making losses unlikely for qualified VA lenders. With lower risk involved more lenders are willing to provide loans to veterans and require less from the veteran borrower. The loan actually comes from lenders and the VA is rarely involved in the loan approval process which is mainly handled by the lenders themselves. Qualified VA lenders calculate the ability of the veteran to pay for the loans using industry standard procedures. In cases where the borrower is no longer able to make payments the lender goes to the VA to claim and cover losses that may have been incurred.
Eligibility for VA Loan Benefits
VA loan benefits are made available primarily to veterans but can also be used by active duty personal, certain National Guard members and reservists, and certain spouses of service personal depending on circumstances. There are many complicated legal requirements and concerns regarding eligibility and it is best to consult experts in VA finance as well as the local VA office itself to check if a particular person is eligible. Most eligibility requirements are posted on the VA website as well as on many online repositories and agencies that support or provide VA Home Loans. Veterans that are eligible under the rules of the program is provided with a certificate of eligibility that is often needed by lending agencies before the release of the loan. Certain lending agencies can check for the eligibility or most individuals through online systems of the VA.
Benefits of Getting a VA Loan
The most noticeable benefits of getting a VA loan is that many lenders no longer require a down payment for the loan. The VA can also lower the funding fee for the loan depending on the size of the down payment provided. Other benefits include not needing a separate private mortgage insurance, limited closing costs, no penalties for loans that are paid of early, and support in cases where the veteran encounters difficulties in making proper payments for the loan. The VA does not impose limits on the size of the loan but does have a maximum amount that can be guaranteed according to law.