For those who have served our country, gratitude is always in order. Since the days of the GI Bill, some of that gratitude has been paid through generous education and financing benefits that allow our military’s veterans and active duty members to build strength and success in their civilian life. One of those benefits, the Veterans Affairs (VA) loan, can make the process and cost of buying a new home easier for our nation’s finest heroes. Here are some of the most commonly asked questions regarding VA loans, with some quick answers and links that will lead you to more information.
What is a VA Loan?
While called “VA loans,” the Department of Veterans Affairs doesn’t actually loan out money. Instead, they provide a loan guaranty, which means that if something happens and the veteran borrower is unable to repay his or her loan, the VA Department will cover the losses for the lender.
What does this mean for me as a borrower?
With the insurance of the federal government behind you, private lenders are able to give qualifying active and retired military personnel loans with highly-preferential terms, such as no downpayment requirement, no private mortgage insurance, limited closing costs and no prepayment penalties. The loans can be used by first-time or repeat homebuyers, and the benefit can be used more than once, as long as prior loan balances have been cleared.
I served in the military. Do I automatically qualify for a VA loan?
Most honorably discharged veterans qualify for the VA loan benefit, as long as they meet minimum service time requirements , which are outlined in detail on the VA site. Even those military members on active duty can rely upon VA loans to help establish the most important base of all: home.
Are there limits on how much I can borrow?
While the VA doesn’t actually impose limits on how much can be borrowed, they do set limits upon how much of a loan they will guarantee. These limits, which are set each year, are available on the VA website, and depending upon your financial situation, may impact how much a lender will lend you.
Is applying for a VA loan really complicated?
While applying for a VA loan does require a bit more paperwork, most private lenders are familiar with the VA loan requirements, and many can help you file the necessary paperwork. Oftentimes, lenders can obtain the crucial “Certificate of Eligibility” online and in minutes, meaning that using a VA loan doesn’t have to be a drawn out and overwhelming affair.
As one of the top builders of affordable homes throughout Texas, LGI Homes has extensive experience helping veterans and those on active duty establish their lives in beautiful new homes. If you’re interested in learning more about our family-friendly neighborhoods—or just have some questions.