By: Carrie Niess
More veterans and wounded warriors took advantage of government-backed mortgages in 2016 than any other year. In 72 years, it has helped more than 22 million active, reserve, and retired service members buy a home.
Yet remarkably, there’s still room to grow. Over 1 million wounded warriors aren’t taking full advantage of their VA loan options, research shows. (See related study: “Wounded Warriors Left Behind? Majority of Post-9/11 Vets Leave Millions of Dollars In Benefits Unclaimed“.)
If you’re on active duty or a vet, now’s the time to take another look at this incredible benefit!
Here are five benefits available exclusively to you and your peers:
1. No down payment or mortgage insurance required. Most loans require a down payment of 3.5% to 20% percent of the purchase price. If you utilize a non-VA loan, and put down less than 20 percent, you’ll be subject to mortgage insurance. That could increase your payment by hundreds monthly.
2. Government guaranteed. The VA proactively monitors each active loan to make sure payments are on track. The VA has foreclosure specialists who can help borrowers 60 or more days behind on their mortgage create a more affordable repayment plan.
3. Fast access, even if you’re on active duty. Service members become eligible for VA loans after having served 181 days during peacetime or 90 consecutive days during wartime — unless discharged or separated from a previous qualifying period of active duty service. You may also be eligible if you have more than six years of service in the National Guard or Reserves.
4. Buy or refinance repeatedly. You can work with the VA to use the benefit as many times as you’d like. There is a VA funding fee of 2.15% for first time VA loan use. That fee becomes 3.3% for each subsequent use of a VA loan. However, that rate is just 0.5% if you currently have a VA loan and only want to reduce your rate or possibly your term (additional restrictions apply) without taking cash out. This option is called a VA IRRRL (Interest Rate Reduction Refinance Loan).
5. Refinance up to 100% of home’s value. Lower monthly payments, consolidate debt and access cash, drawing on up to 100% of your home’s value. VA streamline and cash out refinance loans are far more attractive options than refinancing with a non-VA loan. That’s because many non-VA loans require some equity in the house. In fact, the cash out refinance option allows you to take an existing conventional loan and refinance it to a VA loan. It doesn’t have to be a VA loan refinanced to a VA loan.
Three added benefits available to wounded warriors, including:
1. Exemption from the funding fee. Vets rated at least 10% disabled (because of a service-connected disability) may be exempt from the VA funding fee. Costs add up quickly. Remember, the fee is generally 2.15% of the amount borrowed for first time use. That fee goes up to 3.3% for every subsequent loan. A disabled vet borrowing $200,000 would save $4,250 on their first home purchase or $6,600 if they’ve used their benefit previously. Non-disabled vets can reduce the funding fee by making a larger down payment.
2. Often no minimum service requirement. Disabled vets usually qualify to receive VA loan benefits immediately, without having to wait the minimum required service days. However, even wounded warriors are required to meet certain credit and income minimums to receive a VA loan.
3. Grants for special accessibility modifications. For those who’ve suffered particularly debilitating injuries, the VA offers Specially Adapted Housing (SAH) grants. These grants pay for mobility modifications and help make homes more accessible.
Serving our country is commendable. Individuals who do so deserve certain privileges. The VA mortgage program is an excellent opportunity to save veterans thousands of dollars. Call today and let American Financing’s mortgage specialists help you make the most of your benefits.
Carrie Niess is a copywriter for American Financing, a national company employing salary-based mortgage consultants dedicated to helping homeowners make smart mortgage decisions that align with their unique financial goals.