Veterans: 7 Things to Know About VA Home Loans

VA home loans are a valuable benefit offered to veterans, but the U.S. Department of Veterans Affairs says only 6 percent of eligible veterans use the program to finance a home. It is possible that many veterans who could benefit simply do not understand the program or have misconceptions. Here are some things you should know about this benefit.

1. VA loans are flexible – According to Veterans United Network, less stringent credit requirements and underwriting standards for VA home loans allow many veterans to secure financing even when they would not be able to get a conventional loan. Veterans with troubled financial profiles are encouraged to apply.

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2. Buy or refinance with a VA loan – Most people think you can only use the VA loan program to finance the purchase of a home, but you can also use these loans to refinance an existing mortgage, advises Quicken Loans.

3. Not just for starter homes – VA loans are not necessarily small loans to purchase a first home. Quicken Loans says there is no limit to how many times an eligible veteran can use the program throughout their lifetime, and the loan amounts can be up to $1 million.

4. Lower interest rates – Because the VA insures the loans and reduces the risk to the local lender, the lender is able to offer rates that are usually about .25 percent lower than a conventional loan, says the U.S. Department of Veterans Affairs.

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5. Surviving spouses can benefit – The VA acknowledges that there is no way to repay someone for the loss of their military fallen spouse, but eligibility for the VA home loan program may help them get back on their feet financially speaking. Surviving spouses must not have remarried in order to take advantage of the program.

6. Quick close – Quicken Loans says it is a myth that VA home loans take a long time to process. They assert they can close a VA loan just as quickly as a conventional one.

7. Bankruptcy is OK – Even in cases where a veteran has foreclosed on a previous home or declared bankruptcy, Veterans United Network says the VA loan may still come into play. There is usually a 2-year waiting period after a bankruptcy, but in some cases, it is only 1 year.  

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