VA Home Loans (also known as Veterans Affairs mortgages) make it easier for veterans to get financing to buy a home. VA mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Veterans Administration. The VA determines eligibility and issues a certificate to qualifying applicants to submit to their mortgage lender of choice.

VA home loans are a popular benefits of military service, but unfortunately many military members don’t take advantage of this service due to inaccurate information or lack of awareness that they qualify. If you are interested in learning more about a VA loan, here are five things that you should know about them.

1.    Understanding Eligibility Requirements

Most active members of the military, veterans, reservists, and Nation Guard members are eligible to apply for a VA Home Loan. Spouses of military members who died while on active duty or as a result of a service-connected disability may also apply.

2.    You Will Pay a Funding Fee

Although VA loan costs are generally lower than other mortgage loans, there will still be a one-time funding fee. This fee varies from 1.25% to 3.3% of the amount you’re borrowing.

You can pay the fee at the time of closing or add it to the amount you are borrowing. Some people are exempt from a funding fee, like those who receive disability compensation for their service.

3.    There is No Minimum Credit Score Required

VA loans are more lenient when it comes to the borrower’s credit score. It varies by lender, so make sure to find a finder with the best requirements for your credit score. Most lenders want an applicant with a credit score of 620 or higher, but don’t let that deter you from applying. There are many lenders out there who would go lower on your credit score requirements, but they may raise your interest rate.

4.    You Can’t Use a VA Home Loan For Every Type of Real Estate

VA loans are available only to buy or build a primary home for your personal use. The home must be a house, condo, or manufactured home. A VA home loan cannot be used to purchase or refinance a vacation or investment home.

5.    There is (Technically) No Cap on The Amount You Can Borrow

The VA says there is no cap on the amount you can borrow, however, there are limits on the amount of liability the VA can assume. You are free to keep taking out new VA loans over your lifetime, if approved. It’s even possible to have two VA home loans at one time, or to take out a new VA loan after you’ve been foreclosed on a previous one.

The VA loan limit varies, but the maximum guaranty amount for 2018 is $453,100 and up to $679,650 in high-cost areas in the continental U.S.

The VA loan remains one of the few mortgage options for borrowers who don’t have money for a down payment. It is generally easier to qualify for a VA loan than conventional loans. For a quote on your VA loan, please visit our mortgage lending office in Joplin today. We are proudly serving cities like Springfield, Kansas City, and St. Louis, MO.