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Home Loan Programs For Military Personnel
The Unites States Veteran’s Administration has made available a series of lending opportunities to military personnel who have served in active duty in the Marines, Navy, Air Force, Army and Coast Guard, and have not received a dishonorable discharge. Generous VA purchase, refinance and streamline loans can save the U.S. veteran significant money over the life of the loan with lenders eager to compete with lower interest rates and the “no down payment” policy applied to some purchase agreements.
Some of the benefits from a VA purchase loan for the veteran’s primary residence include restrictions on the amount of closing costs applied to the mortgage, no penalty for early loan balance pay off, and offers an assumable mortgage to qualified candidates who wish to assume.
The VA refinancing program resembles the private sector loans that enable the home owner to pull cash from the property’s equity and refinance even when the payments are in delinquency. However, the new terms and conditions will be regulated by the private lender.
The streamline refinance option, or IRRRL, allows the veteran to change a short-term ARM to a long-term fixed mortgage, with no cash out of pocket. In some cases, the lender may require a property appraisal and check the applicant’s credit score.
The VA lending procedure is similar to a traditional mortgage loan in that the VA recipient is entitled to a property appraisal. The approximate market value of the home is estimated on the CRV, or certificate of reasonable value and the paperwork is sent to the lending institution for approval. In most cases, the VA will accept appraisal certificates from appraisal companies that have been in business for at least five years.
The veteran may purchase a home at any market price, however, the VA lending system does not grant a loan balance to exceed the CVR findings. The over-budget difference in cost may be paid in cash or carried by a private lending institution. In situations where the CVR price is higher than the asking price, the veteran does not have to make a down payment on the property.
The qualified veteran may select a long-term fixed rate loan to extend to a maximum of 30 years and 37, or choose a an ARM. Applicants for the short-term ARM must adhere to VA regulations that require the loan to have a limited up or down interest rate of 1 percent, a final interest rate cap not to exceed five points above the initial interest rate at signing, and ensure the monthly payments will adjust on the annual date if signature.
To apply for a VA housing loan, the applicant must fill out a “certificate of eligibility” or complete the VA Form 26-1880 along with papers verifying active duty since September 16, 1940. In addition, you must include copies of your military separation papers. Select a real estate agent to help you with the house hunting and sign the purchase agreement. Call your local VA lending office and apply to the mortgage agency of your choice. The VA will take it from there, and you’re ready to move into your new home.
VA Loans
A VA (Department of Veterans Affairs) loan is designed to assist the heroes who served in our armed forces and helped protect our country. Any retired soldier can obtain VA loans, even if they only served during peacetime. There are several eligibility requirements that you should know about when determining of you are eligible for a VA loan.
Retired soldiers who have served a certain span of time are eligible. The required period of time that you must be enlisted varies depending on whether you were active during peacetime or a time of war. During a war, eligibility is given after 90 days of service, but eligibility during peacetime requires 181 continuous days. Wartime and peacetime are actually defined as certain calendar periods. For more information, contact your local VA. Its important to note that if you were dishonorably discharged, you are ineligible regardless of the amount of time you served.
Some spouses are eligible for VA loans, too. If you are the spouse of a POW or a soldier missing in action, you may be eligible. Also, a spouse (who did not remarry) of a soldier who died while serving, or due to a service related disability, may be eligible. Contact a VA loan official to discuss your eligibility.
If you fulfill the requirements, contact a VA loan organization for a copy of Form 26-1800 (request for a Certificate of Eligibility) and fill it out. You local VA may be able to assist you in finding loans, but they wont respond to requests for eligibility forms. That must be handled through the actual loan organization.
You are also eligible if you are still currently on active duty, as long as you have served the required number of days (depending on wartime or peacetime). If you arent in any of the above categories of eligibility, you can become eligible after serving 6 years on Selected Reserve. This six-year requirement doesnt have to be consecutive. Again, a dishonorable discharge from the Reserves will make you ineligible.