Borrowers with a military background — be it as an active-duty member, veteran, or surviving spouse — have the benefit of acquiring VA loans to help service members live peacefully as homeowners despite the challenges that come with the title. While VA loans seem easy to understand at first glance, it’s a complex program with plenty of factors to consider so you know whether you’re eligible for this type of loan and the other requirements under its policies.
What Is a VA Loan, and What Are the Different Types?
A VA loan supported by the Department of Veterans Affairs (VA), making military members eligible for financial support. Keep in mind that the VA benefits are provided by private lenders instead of the VA itself, so it will be the banks, mortgage companies, and other financial institutions that lend the money to the military applicants.
There are also different types of VA loans you can use depending on your specific needs, such as the following:
- Purchase Loan – this is the go-to choice of homeowners as it provides competitive terms for VA-backed purchase loans;
- Interest Rate Reduction Refinance Loan (IRRRL) – this caters to borrowers who already have an existent VA-backed home loan but want to refinance to either reduce or stabilize their monthly payments;
- Cash-Out Refinance Loan – for current homeowners who need to cash out their home equity to pay for unexpected bills, a cash-out refinance loan is the best option;
- Native American Direct Loan (NADL) Program – for Native American veterans or military members married to a Native American, this is a dedicated program designed to help you buy, build, or repair your home on federal trust land.
Why It’s Worth Taking Out a VA Loan
There are indeed other competitive loan options available that can help give you a piece of the American pie, but it’s easier to become a military member homeowner using VA loans for the following advantages it offers:
- No down payment;
- No Mortgage Insurance Premium (MIP);
- Flexible eligibility requirements;
- Approves low credit scores;
- Accepts higher debt-to-income ratios;
- Lower rates than the conventional loans;
- In case of a foreclosure, the VA can negotiate with the lender to help your approval process.
Who Is Eligible for Different Types of VA Loans?
Not all military members have the benefit of obtaining VA loans, though any veteran, active duty military member, surviving spouses, and current or past members of the Reserve and National Guard can be eligible so long as they meet the following requirements:
- 90 days of active duty during wartime;
- 181 days of active duty during peacetime;
- Less than 90 days of active duty, but only if the applicant is discharged for a service-related disability;
- 6 years of active duty in the Reserves or the National Guard;
The Bottom Line: Understanding How VA Loans Work for Military Families
VA loans are a complex mortgage package, but it’s one of the best benefits given to eligible military members since the program allows for multiple usages. This alone puts it at a completely different level than other loans, allowing veterans or service members to make their dreams of becoming a homeowner a reality.
Why Shop for VA Loans with Halpern & Associates?
Halpern & Associates knows that every person has unique financial capabilities and needs; that’s why we strive to provide loan options tailored to your lifestyle.
If you’re a veteran, military office, or military spouse who needs help finding the perfect home to settle down despite the volatile nature of this career, our mortgage brokers in Florida can help you reap the benefits from your VA loans.
Reach out to us today — we can help you through every step of the process!