VA Home Loan

VA home loan is unanimously the finest and most obvious choice for veterans who are willing to purchase a home or refinance the existing mortgage loan. The Department of Home Affairs was established in 1931 and one of the major financial benefits provided by the Department is the VHA home loan. With a home loan from VA, one can buy expensive houses, get lower rates of interest and save money on mortgage insurance.

The VA provides a host of services like patient care, customer satisfaction and many other benefits for veterans. More than 60 million veterans are eligible to receive VA home loan. One of the greatest advantages of a VA home loan is that no down payments are required to be made in order to get home loan. Recently, the loan amount limit has been increased to $417,000. In January 2006, it was decided that the veterans who have qualified for the loan and military men who have been on active duty could get a loan amounting up to $625,000 in areas of high cost.

The Veteran home loans help in saving a lot of money. The interest rates that are offered are very reasonable and monthly mortgage insurances are needed for VA home loan. The parameters of qualification for the home loan plans of VA are quite simple. The disabled veterans get extra benefits while securing a home loan. The military loans can be very cost effective if someone is injured during the service period. Those who have a checkered credit history, but have been improving on that over a period of one year are also eligible for low interest rates on home loans.

The VA home loan is guaranteed by the US government and therefore, there is no need for any insurance. Future borrowers are also attracted by the assumability of these loans. The mortgages are offered at both fixed and adjustable rates. If the person has plans of staying in the purchased home for more than five years, he qualifies for an FRM and if the period is less than that, then he qualifies for an ARM.

The Funding Fee required by the Department of Veteran Affairs is between 0 – 3.3% of the loan and this depends on the present veteran status of the borrower. The funding fee is included in the total amount received as loan and therefore the borrower is not required to pay out from his own pocket. The qualifications for a VA home loan are the eligible wartime services provided during the following time periods:

WW II – 09/16/40 to 07/25/47
Korean War – 06/27/50 to 01/31/55
Vietnam War – 08/05/64 to 05/07/75

The person applying for a loan must have been in active service for a period of at least 90 days unless he has been discharged due to disability and in general, one cannot be discharged under dishonorable circumstances in order to qualify for the loans. The peacetime service periods requiring to be served in order to qualify are as follows:

07/26/47 to 06/26/50
02/01/55 to 08/04/64
05/08/75 to 09/07/80
10/16/81


In the second case, the person should have been in active duty for a period of minimum 181 days and if discharged earlier for reasons other than those that are dishonorable, it should be on grounds of medical reasons, disability and involuntary reductions in force.