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VA Loans: A Step-by-Step Guide

By    |   Thursday, 12 Oct 2017 11:50 AM

Most people yearn to own a home and, while a mortgage loan is a scary prospect, a VA loan is an affordable alternative for many veterans.

As New Florida Mortgage points out, there are many benefits and options for a VA loan, including low interest rates, limited closing costs, and no mortgage insurance.

The process of obtaining a VA loan may seem a bit daunting at first, but when it’s broken down, it’s actually pretty simple.

Here’s a step-by-step guide to securing your VA Loan:

Find out if you qualifyAccording to the U.S. Department of Veteran Affairs, veterans who have served at least 90 days during wartime or 181 continuous days of active duty during peacetime are eligible for VA loans.

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These loans are also available to active duty personnel, members of the Reserve or National Guard who have completed six years of service, and spouses of veterans.

VA loans can be used to purchase a new home, to refinance an existing mortgage, to build a home, or for energy-efficient improvements.

Find a lender and figure out what you can affordMilitary.com writes that you need to use a lender approved by the U.S. Department of Veteran Affairs.

Using a VA specialty lender has the added advantage of working with someone who knows the application process well and can guide you through it.

The Department of Veteran Affairs themselves suggest you shop around, as different lenders have different interest rates, discount points, and closing points.

Once you’ve decided which lender to use you can pre-qualify to find out what size loan you can afford and to get a sense of the price range you’ll be looking at.

Forbes warns that you shouldn’t necessarily take the maximum amount you are offered. Experts suggest that, in order to be able to afford your loan, you should cap your repayment at 28 percent of your income.

Get your Certificate of Eligibility — Only people with a valid Certificate of Eligibility (COE) can qualify for a VA-guaranteed home loan.

According to Military.com, a reputable and experienced lender should be able to help you obtain one or you can fill in a form on most lenders’ websites. Alternatively, you can get one online via the VA’s eBenefits portal.

Go house hunting — Once you’ve pre-qualified for a VA loan, you know how much you can spend.

New Florida Mortgage suggests first deciding what kind of home you want. It could be a single-story house, a condo, or even a mobile home, but keep in mind that VA loans are subject to some restrictions.

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The Department of Veteran Affairs suggests working with a knowledgeable real estate agent to help you get the most out of your loan.

A full list of minimum requirements is available on the VA website.

Once you’ve found the perfect property, you can sign a purchase agreement with a VA option clause and get the ball rolling.

Complete your loan application — The signed purchase agreement needs to be sent to your lender, who’ll then arrange a property appraisal.

Military.com explains that this needs to be done by someone who’s properly certified. An appraiser’s job is to make sure the property is worth what you’ve agreed to pay for it.

While this process is being completed, the Interest Rate Reduction Refinance Loan website suggests you start submitting the necessary application documents like your bank statements and pay stubs.

Once the lender has all the necessary documents and the appraisal is done, all that’s left is to verify your loan.

Close the deal and move in — According to the Department of Veteran Affairs, a lender will usually appoint a representative or attorney to coordinate the time and date of transfer.

This is the time you’ll sign documents stating that you understand the terms of the loan agreement before the home is transferred to your name.

Once that’s done and the closing costs are paid, your new home is all yours.

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Most people yearn to own a home and, while a mortgage loan is a scary prospect, a VA loan is an affordable alternative for many veterans.
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2017-50-12
Thursday, 12 Oct 2017 11:50 AM
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