The Department of Veterans Affairs (VA) has several different home loan options that you can apply for if you served in the military. Some home loans from the VA can be used to purchase a new house, while others are designed to help you reduce your payments or get cash out of your home’s equity, among other things. Most loans are available for any veteran, but some require that you fall within a specific category to qualify, similar to how veteran grants work.
Homeownership as a veteran becomes much easier with a loan from the VA. Not only can you finance the purchase of a home, you can also get help from the VA to modify your payments and make homeownership more manageable. Whether you are interested in buying a home or getting a loan from the VA for any other purpose, find the information you need in the sections below.
Learn About VA-Backed Home Loans
A VA purchase loan is one of the most popular loans for veterans. A home purchase loan is a great option due to the fact that it is guaranteed by the VA, which simply means that the VA will back a certain portion of your loan in the event of a foreclosure. As a result, your lender is less likely to lose anything if you do foreclose on the property and is therefore more likely to offer great terms for a VA-backed loan.
Choosing a VA-backed home loan over traditional financing is the best option for many veterans. By using a VA guaranteed loan, veterans can get benefits such as:
- No requirement for making a down payment.
- No requirement for getting private mortgage insurance (PMI), which is required with most conventional loans when little to no down payment is made.
- Lower interest rates and better loan terms.
- Lower closing costs.
- No penalties for paying off a loan early.
With a VA home loan, you can do anything from buying your first house to building a new home or making changes to an existing residence. To qualify, you need to have a Certificate of Eligibility (COE) from the VA and meet any requirements that your lender may have, such as income or credit requirements. Furthermore, you can only get one of these loans if you plan on living in the home that you are financing.
You may also qualify for veteran housing assistance without taking out a loan depending on your situation.
Find Out About Cash-Out Refinance Loans
If you’re already a homeowner and want to get better terms or rates on your current loan, using a VA-backed cash-out refinance loan could be your best option. These loans allow you to do either of the following:
- Take equity out of your existing loan if you need extra funds.
- Refinance a non-VA loan in order to change it to a VA loan.
To refinance your mortgage into a VA loan, you will need to find a lender that provides this service. Take your time to research different providers so that you can find a reputable lender that offers the exact services you need.
Understanding the Native American Direct Home Loan (NADL) Program
If you are a Native American Veteran or are a veteran with a Native American spouse, you may qualify for the NADL program. These loans allow you to buy, repair, build or improve a home on Federal Trust Land. These loans can sometimes be used to refinance your existing loan in order to get a better interest rate as well.
With an NADL loan, you can enjoy many different benefits similar to those offered through the VA-backed loan program. For example, NADL loans allow you to get a home with:
- No down payment or PMI requirements.
- Lower closing costs.
- A 30-year fixed-rate mortgage with low interest rates.
Learn About Interest Rate Reduction Refinance Loans (IRRRLs)
Veterans who already have a VA-backed home loan can obtain an IRRRL if they wish to lower their mortgage payments or switch from a variable interest rate to a loan that has a fixed interest rate. This type of loan can be obtained through a private lender as long as a veteran has obtained a COE. Because these loans are offered through private companies, the exact application steps and loan terms may vary from one lender to the next.