Serving your country as a military veteran is truly a rewarding experience, but settling down with your family is one of the many challenges that come with it. The nature of an active duty service member’s career is often volatile, after all, so purchasing a home has its unique difficulties compared to other aspiring homeowners.
Fortunately, VA loans come into play to allow veterans, military members, and surviving spouses a chance at homeownership, making it one of the most significant benefits dedicated to the nation’s heroes.
What is a VA Loan?
Compared to other loan options, VA loans are run by the U.S. Department of Veterans Affairs. While they guarantee mortgage loans, they’re not necessarily lenders, so they don’t issue these loans directly.
Instead, the VA serves as an insurance policy to the lender to reduce the risk, allowing borrowers to apply with looser eligibility requirements. Generally, private mortgage lenders offer VA loans with no mortgage insurance premiums (PMI) necessary.
Borrowers also don’t need to pay down payments and have the chance to finance 100 percent of the price of their home. When military members need to move to new locations, VA loans make it possible to purchase another home, though a funding fee will go from 2.15 percent to 3.3 percent for repeat buyers.
Different Types of VA Loans You Should Know
- VA Purchase Loan – This is the go-to choice since it’s a standard mortgage that offers secure terms with your lender. With a VA purchase loan, military borrowers don’t need to save for any down payments;
- VA Cash-Out Refinance – If you need cash for emergency reasons, VA cash-out loans allow borrowers to take 100 percent off their home’s equity. This gives enough financial boost to cover medical bills, pay debts, provide for education, make necessary home improvements, and more.
- VA Interest Rate Reduction Refinance (IRRRL) – If you have an existing home loan, you can use VA IRRRL to lower your interest rate and reduce your overall monthly mortgage payment. This pairs well with fixed-mortgage VA loans.
- VA Native American Direct Loan (NADL) – If you’re a military member and a Native American, you can apply for a VA NADL to purchase and plot your home on federal trust land.
- VA Renovation Loan – If you only need money to renovate your home or complete critical repairs, you can opt for a VA renovation loan instead of the traditional option so you can simplify your terms.
The Bottom Line: VA Loans for Military Families
There are different types of VA loans for every kind of military member, so applying for the right VA loan type should ensure you get the financial aid that suits your needs.
Why Choose Mortgage City?
We’re a licensed mortgage originator in Detroit, Michigan, Florida, and New Hampshire striving to help people turn their dream homes into reality. With our client-centric and tailored loan services, we can help you reach your financial goals and boost your mortgage points. Call us today at (248) 930-8709!