What to Consider Before Buying a Home with a VA Loan

Buying a Home with a VA LoanWhen buying a new home, dealing with loans can seem daunting. Fortunately, the U.S. Department of Veterans Affairs offers a program to current and former service members to help them in the home-buying process. Veterans Affairs loans, or VA loans, are part of a program put in place to help ease the financial burden of moving due to military obligation or settling down after retirement from the military. VA loans come in many shapes and sizes, so it’s important for active service members and veterans to know what they qualify for before beginning the process of buying a home with a VA loan. Here are a few things to keep in mind before applying for a VA loan.

VA Loan Eligibility

There are several different types of VA loans available to active and veteran service members, and each exists to help service members get the most out of their loans. These different loan options include:

  • Purchase loans: These loans help buyers purchase a home without a down payment and without the financial obligation of private mortgage insurance required by FHA loans.
  • Interest Rate Reduction Refinance Loan (IRRRL) or Streamline Refinance Loans: These loans help current veteran home owners refinance their existing VA loan for a lower interest rate.
  • Native American Direct Loan (NADL): Loans intended for Native American veterans who want to purchase or build a home on Native American Trust land. A valid Certificate of Eligibility (COE) is required.
  • Adapted Housing Grant: Helps veterans with permanent disabilities build, refurbish or purchase a home that offers the accessibility they require for everyday life.

In some cases, spouses of deceased service members can be eligible for VA loans as well.

Advantages and Disadvantages of VA Loans

There are many reasons to consider using a VA loan when buying a new home: They don’t require a down payment, there’s no requirement for private mortgage insurance and VA loan home buyers are eligible for basic allowances for housing to cover the monthly mortgage costs. To help pay for the funding provided by the VA loan program, buyers are still required to pay a VA Funding Fee. The fee is cycled back into the VA home loan program to keep it running in the future, though some buyers may find that it feels like a down payment, even if the money is going somewhere else.

Another aspect of buying with a VA loan that should be considered is simply that not all sellers will agree to accept the loan. Whether it’s due to lack of understanding, lack of interest or lack of ability to meet the requirements stipulated by a VA, some sellers will completely refuse to work with buyers who have a VA loan. This may cause veteran home buyers to miss out on a home they want.

Buyers considering a VA loan should verse themselves in the varying aspects and nuances of the process and its requirements, so that they can ensure they make the choice best suited to them and their needs. VA loans can provide financial aid and assistance to active and veteran service members for a variety of housing circumstances, and because of that, they are a valuable asset for veterans making the investment in a home. Before applying, be sure to fully research VA loans, and for more information about VA loans and the home-buying process, contact a local real estate professional who can assist in the process.

Need to sell your home?

Find out how much it will sell for today!

Check your equity now in 60 seconds
Kris Lindahl Real Estate

Home of the one day listing contract

Leave a comment

Buying a Condo: 4 Reasons Its Better Than a House

Homebuyers are faced with lots of options! Many people might feel stuck when choosing between condos, townhomes, and single-family homes. Detached homes are often the go-to, which causes buyers to overlook many of the amazing condos for sale in their area. Condominiums offer many unique advantages in the great house vs condo debate. They’re often […]

Continue Reading

Best First Home: Single-Family Home vs Townhouse vs Condo

Real estate remains one of the best investments a person can make in their lifetime. The property builds up equity over time, putting the investor’s money to work for them. If they choose to rent the property to someone else, the rent checks pay the mortgage and might even provide passive income over and above […]

Continue Reading

Suburbs Closest to Minneapolis-Saint Paul International Airport: Guide For Frequent Flyers

The city of St. Paul and city of Minneapolis are bustling hubs of culture and commerce. Those who want to live just outside the area while still having easy access to the Minneapolis-St. Paul International Airport (MSP) have many excellent suburbs to explore. From affordable housing and amazing shopping to picturesque parks and historic sites, […]

Continue Reading