As a reservist or veteran, you may be uniquely qualified for a type of mortgage loan that can make homeownership more affordable. Those who are planning to make a small down payment may want to look into VA loans, in addition to conventional loans. There may be benefits to taking out a VA loan that would not apply to those who can only take out the typical home loan from a lender.
Spouses, as well as military personnel, may want to learn more about this special program and home mortgage loan product. Learn more about VA loans today.
Have You Served Your Country?
Such individuals may want to apply for a VA loan. Those with a record of a minimum of 90 days of honorable service during wartime or at least 181 consecutive days may be eligible for a VA loan. Members of the Reserves, veterans, National Guardsmen, and their spouses may apply.
Why Apply for a VA Loan?
A VA loan is a practical alternative to traditional mortgage loans supported by the Department of Veterans Affairs. Borrowers may be allowed to put zero down or make a small down payment and still be approved for this loan, and applicants are offered more generous interest rates and have less stringent credit requirements. Because of this, even military personnel who have the means to make a down payment should still consider purchasing a home with a VA loan.
VA loans are one of the unique programs not requiring mortgage insurance for borrowers offering a small down payment. Private mortgage insurance (PMI) is required for borrowers who are putting down less than 20 percent on a conventional mortgage loan. PMI is also a requirement for borrowers who choose to take out an FHA loan. This additional payment goes to the lender and does not build equity. Borrowers taking out a VA loan do not have to pay PMI. Borrowers can use this savings toward home improvements or other bills.
What Documents Are Needed to Apply?
Surviving spouses and military personnel applying may want to gather a few documents when applying for a VA loan. Documents include:
- Adequate entitlement
- A good credit history
- A debt-to-income ratio not in excess of 41 percent
These documents can get an individual or couple started on their application. A lender may be help an applicant get a Certificate of Eligibility later in the process. There are other factors that would be considered by a lender when applying for any home mortgage loan products. Prior to applying, individuals may want to pay down debt and improve their credit score. One may want to request a free credit score to get a better idea of what areas to work on if necessary.
Understand More about VA Loans
Those looking to purchase their first home may not be aware of the special loans they may qualify for by serving their country honorably. Borrowers may be able to get better terms when offering a down payment of less than 10 percent with a VA loan. Approved applicants may enjoy fewer related costs and more flexibility with this type of home mortgage loan product, including the possibility of covering closing costs in specific cases. For additional details about VA loans and eligibility requirements, speak to a VA mortgage loan lender.