Supporting our Warriors with VA Loans

There isn’t enough gratitude in the world to give thanks to the men and women who sacrifice their lives to defend our freedoms. Our first President, George Washington, who said that “When we assumed the Soldier, we did not lay aside the Citizen,” would be very proud of one way that America supports its veterans—by helping them get mortgage loans, no matter what kind of challenging lending environment exists.
   
Understanding Veteran’s Administration loans

The original home loan guaranty program began in 1944, as a way to help veterans become homeowners after wartime, because the economic climates when they returned were not always conducive to helping them begin new lives. Supporters of the original legislation believed that soldiers who were away at war were unable to establish good credit ratings, and therefore unable to comfortably qualify for traditional mortgages. It’s sure hard to charge your groceries when you’re on the battlefield.

The following people are eligible for VA loans:

• Veterans
• People on active duty
• Qualified surviving spouses of military personnel

Advantages of a VA mortgage

You won’t actually be getting a loan from the VA; the VA guarantees the loan that you’ll get from a traditional private lender. In other words, if you default, the VA will cover any losses the lender might incur.

There are huge advantages with a VA loan that you can’t get with a traditional mortgage. First, you can buy a home without a down payment and without private mortgage insurance, as long as your credit is good, you have stable income, and the sale price of your future home doesn’t exceed its appraised value.

Second, the VA limits the amount of closing costs that you can be charged, and allows the seller to pay them if it’s negotiated into the contract. There are no pre-payment penalties, and the VA may be able to provide assistance if you run into trouble making your mortgage payments.

Application process

The first thing to do is to apply for a Certificate of Eligibility. Then, locate a bank that offers VA loans. You may want to get “pre-qualified,” which can make the process easier down the road.  The fun part begins then—shopping for the home that you want to buy, so take your time and enjoy that part of the process.

Once you find it, you’ll enter into a contract, but make sure that it has a “VA option clause.” Your lawyer and realtor should be aware of this, but it’s always important to enter every potential battlefield prepared. Make sure that the contract offers an “escape” clause, just in case you’re unable to get the loan of your choice. Next, formally apply for your VA loan. The bank will handle all the logistics and paperwork from that point on.

Soldiers fight for the American dream. VA loans help them fulfill it, by simplifying the process of becoming homeowners. Now that’s something worth fighting for.