VA Home Loans

A VA home loan is one of the most attractive loans in the industry with no down payment, no mortgage insurance, and it's guaranteed by the government so rates tend to be lower than what's available in a conventional mortgage. Best of all, it's available to veterans, active duty military, and qualified surviving spouses.

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To be eligible, you (or your spouse) must have served

181 days during peacetime
90 consecutive days during wartime (unless discharged or separated from a previous qualifying period of active duty service)
6 years in the National Guard or Reserves

Advantages

No down payment (for qualified borrowers)
No mortgage insurance (for qualified borrowers)
Low interest rates
No prepayment penalties
Closing costs can be absorbed by or shared with the seller
Refinancing up to 100% of your home's value

What you need to know

Use a VA mortgage as often as you'd like and feel comfortable doing so. The VA proactively monitors its loans to ensure foreclosure avoidance. Should you have problems with making payments, the VA can help by creating a more affordable repayment plan.

As importantly, most fees are avoidable. But, there is a funding fee that is applied to the VA loan. The funding fee proceeds go directly to the VA and help cover losses on the few loans that go into default. It can be financed, but must be paid at closing time.

There are additional benefits available to you if you experienced a service-connected disability. Vets who are rated at least 10% disabled:

Can be exempt from the VA funding fee
May not need to meet a minimum service requirement
May be eligible to receive Specially Adaptive Housing (SAH) grants for home modifications

With all new home purchases an "escape clause" is required as a safety margin for the VA loan applicant. This clause protects the buyer from being obligated to a VA mortgage loan when the appraised value of the home doesn't match the selling price.

And with refinances, you have options. In choosing a streamlined Interest Rate Reduction Refinance Loan (IRRRL) you can reduce monthly payments via lowering your rate. Closing costs can roll into the loan, and you can enjoy a speedy process because of little paperwork and potentially not needing an appraisal. Or, you can choose a cash out option where you can use home equity to take out funds for any purpose: paying off high-interest debt, making home improvements, covering emergency expenses, etc.

Funding fee

VA Cash Out

2.3% of purchase price if it's the first time you access a VA loan, otherwise it's 3.6% of the home purchase price

VA Streamline

0.5% of the purchase price. 0.5% of the loan value.

Access to cash

VA Cash Out

Yes

VA Streamline

Yes

Mortgage insurance required

VA Cash Out

VA Streamline

If your goal is to get out of debt, the best thing to do is to eliminate it as soon as possible. Having smaller monthly payments may be suitable for some, but if the payment relief is not necessary it may be better for your future to avoid the long term loans. Talk to one of our mortgage consultants now, they can help you make the best choice on mortgages and could eventually help prevent further debt from increasing.

Whatever your need, American Financing is a rising member of the VA's list of top 300 lenders and can help you make the most out of your VA loan benefits. Get started today. Make the call to (800) 910-4055 or complete the online application.