Published on: May 10th, 2022 | Written by Jimmy Vercellino
how does a va loan work

As the home market continues to fluctuate, it may be the perfect time to buy with the VA Home loan. If you’re an active-duty service member or vet, there’s a good chance you qualify.

You don’t want to miss out on this 0% down payment home loan to move into your family’s dream home.

However, VA Loans are not the same conventional loans, FHA loans or other home financing options. They have unique service qualifications, eligibility, and benefits that no other loan has.

That’s because the Department of Veterans Affairs (VA) guarantees them and places regulations in so you can enjoy your home without default or financial obstacles.

Whether this is your first time buying a primary residence or you’re going at it again, you’ll need to freshen up on how VA Home Loans work.

What is a VA Loan?

Unlike other loans on the market, the VA Home Loan is an affordable program that awards military families that have served or are currently serving. And you won’t be bound to a seller’s sketchy conditions with a purchase loan.

They provide the incredible opportunity to receive a 0% down payment home with less strict credit score requirements. You also gain access to lower interest rates than other home loans since the VA provides financial backing.

While the competitive real estate market rages, you get an easy foot in the door and don’t have to worry about bidding on a home.

Who’s Eligible for a VA Loan?

The VA Home Loan has certain branch and service requirements for vets and active duty service members to become eligible.

Providing homes to deserving honorably-discharged personnel, your lender checks to see if you meet the VA’s standards.

If just anyone in the military could receive access to VA Loan benefits, there would be many families left out.

We recommend speaking to VA-approved lenders that can personally check your VA Loan eligibility, and let you know if you can obtain this financing option.

Also, they can tell you more about our VA refinancing loans, such as the VA Cash Out Refinance.

Eligible Branches of the Military

  • Active Duty Service Member
  • Veteran
  • Current National Guard or Reserve Member
  • Discharged National Guard Member
  • Discharged Reserve Member
  • Surviving Unmarried Spouse of a Service Member

Military Service Requirements

  • 181 days of active duty service during peacetime
  • 90 days of active duty service during wartime
  • 6 years of service with the National Guard or Reserves
    Or
  • 90 days with National Guard or Reserves under Title 32 with at least 30 consecutive active days
  • Surviving spouse of a service member who died in the line of duty or who suffers a service-connected disability

Types of VA Home Loans

“VA Loan” is a broad loan term with 3 types that determine your mortgage rate, mortgage payments, and loan amount.

Explaining each these options in light of your current finances, a VA lender can help you decide which option is best for you.

For example, you may not qualify for the VA Jumbo Loan with a $900,000 home in California. But your 620 credit score could earn you a $647,000 home if it falls within your county’s VA Loan Limits.

Fixed-Rate VA Loan

As the name applies, your VA Loan rate stays the same after completing the rate lock. That means the fluctuating home market can’t touch your home loan, whether it’s doing great or poorly.

The Fixed-Rate VA Loan shares the 0% down payment with the rest and doesn’t ask for any private mortgage insurance (PMI).

Adjustable Rate VA Loan

You’ll deal with the fickle home buying market by choosing an Adjustable Rate VA Loan. While payments rise and fall over the loan life, a lender can’t exceed your initial terms over a particular period.

VA Jumbo Loan

For expensive counties where the VA Loan Limit exceeds $417,000, you should choose a financing loan that can handle it. With a minimum down payment and higher credit score requirements, the VA Jumbo Loan gives access to higher home prices.

Greater buying power and financial support from the VA make this home loan ideal for buyers with extra cash.

The VA Loan Process

Our team understands that a lot of private lenders abandon honest vets by the wayside. When they need personalized service and human connection, they turn them away.

However, personable VA lenders walk you step-by-step through how to obtain the home you’ve always wanted. Our team calls this process the VA Loan Journey and can take you through it as a military-run team.

Choose your dream home

Assess the market

Your current finances or mortgage rates may be too high for buying a home. By having a one-on-one conversation with an experienced lender, they can provide advice for moving forward with the VA Loan.

Partner with a local agent

While a mortgage company or lender provides funds for your dream home, a real estate agent takes you shopping. They show potential prospects in the local area, so trust them to navigate through the ebbs and flows of the home buying market.

Partner with a trusted lender

Apply for the loan

The first step with a local lender is filling out the VA loan application. For personable VA lending teams, they can assist with the paperwork in person so you don’t have any trouble along the way.

Submit required documents

You’ll need a Certificate of Eligibility (COE) and other documentation to pursue the VA Home Loan. If you’ve already started working with an experienced lender, they can pull this information on your behalf.

Get pre-qualified

Once the mortgage company receives the necessary documents, they’ll explain the loan amount, mortgage rate, and loan length you qualify for.

You need to choose the most affordable VA Loan terms and partner with someone that has personal stake in serving military families.

Bring in a licensed appraiser

Home inspection

Like other home loans, the lender requires an inspection to determine whether the property is worth what you’re paying. They don’t want to invest in your dream home if it loses them tens of thousands in the future.

VA Appraisal

Veterans Affairs has an additional home evaluation you must undergo for the lender to sign off. The requirement stands as another check for the US government to ensure you move into a home that doesn’t fall apart.

If the VA is awarding your family the home you’ve always wanted, they want it to last for years to come.

Celebrate the loan closing

Closing Costs

You must pay the VA Funding Fee, VA appraisal, and other charges when closing the loan. Completing these closing costs finishes the home’s sale and “closes” it.

Close on the VA Home

Attending the closing together, you’ll meet the VA lender at the title company. They’ll assist with signing the last of the paperwork. It’s a binding contract that says you’ll pay of the home in the set terms and conditions.

You’ve purchased with the VA Loan

Congratulations! Spend the rest of your lives or the next few decades in a home you’re proud to live in.

Apply for a VA Loan with a Military Lender

Even if you understand how VA Loans work and the journey, that doesn’t mean you have an experienced lender by your side. Most are notorious for causing delays and taking several days before reaching back.

Our military-run VA lenders are different by treating you like a person rather than a number. Jimmy Vercellino, our division branch manager, hands out his personal cell so you can reach him whenever you need him.

The rest of our experienced lenders are ready to receive your call and let you know if you’re eligible for the most affordable military home loan.

Call our office today at (602)-908-5849 to speak with Jimmy or another member of our team. We’re honored to receive your call and award you for your service and sacrifice.

Misc

Author

VA loan specialist Jimmy Vercellino
Jimmy Vercellino

Mortgage Originator, Specializing in VA Loans

Jimmy Vercellino, a Marine veteran, specializes in helping military veterans benefit from the VA Loan Program and buy the home of their dreams.