What is a VA loan? And how do you qualify for one?
If you're currently serving or have served in the U.S. military, you'll want to know, because VA loans are a great deal.
1. What is a VA loan?
A VA loan is another term for a Veterans Affairs mortgage. The loans are made through private lenders and are guaranteed by the Department of Veterans Affairs, so they do not require mortgage insurance.
2. Who are they for?
Are you an active-duty member of the military or a veteran? You'll likely qualify. And National Guard and reservists are also eligible. Spouses of military members can be eligible, but there are several caveats.
3. Any other fun facts?
Not only do VA loans not require mortgage insurance, they also do not require a DOWN PAYMENT!
4. Why didn't you say that first?
Great point. Sorry about that. VA loans do not require down payments, which makes them hard to beat if you qualify. And even more great news? There's no minimum credit score requirement.
5. But there's still a cost, right?
Yes, there is. There's an upfront funding fee that varies from 1.25% to 3.3% of the loan amount, and it can be rolled into the loan. And as with other mortgages, closing costs will need to be paid.
For those who qualify, VA loans offer the ability to finance 100% of the loan amount at low rates. It's worth meeting with a mortgage lender to learn more.