Veteran's Administration Mortgage Loan Guaranty
One of the best known and highly coveted benefits of honorable service in the United States military is the Veteran's Administration mortgage loan guaranty program.
According to a recent Mortgage Bankers Association's National Delinquency Survey, the Veteran's Administration's (VA) foreclosure and serious delinquency rates have been the lowest in the housing industry, even when compared to prime loans. VA-guaranteed home loans are made by banks and mortgage lenders, with the VA ensuring payment of a portion of the loan if the borrower fails to repay the balance. Because the VA backs the loan, it is easier for mortgage lenders to approve.
When using the VA Loan Guaranty, you can buy a home, refinance to a lower rate, buy a townhouse or condominium unit, or even build a home.
Compare Lenders and Find the Best Rates
The VA does not give you the loan! They guarantee the loan. When you apply for your mortgage, you choose the bank or credit union that you wish to do business with. There are many companies out there that do specialize in VA loans, but they are not necessarily the best option. Take the time to compare rates. Shop around!
In a time where other "no-down-payment" programs are virtually non-existent and mortgage credit can be difficult to get, Veterans and Servicemembers have an avenue to obtain financing and take advantage of historically low rates through the VA home loan program (your length and type of service may determine your eligiblity for the various programs).
Most Veterans, Servicemembers, Reservists, and National Guard members, as well as some surviving spouses, are eligible for the program which provides an opportunity for borrowers to qualify for "no-down-payment" home loans as well as regular and interest-rate-reduction refinance home loans.
For those looking to refinance their current loan, the VA Interest Rate Reduction Refinance Loan (IRRRL) lowers your interest rate by refinancing your existing loan. By obtaining a lower interest rate, your monthly mortgage payment should decrease. You can also refinance an adjustable rate mortgage (ARM) into a fixed rate mortgage.
And again, Servicemembers and Veterans are strongly urged to contact several lenders because terms may vary.
Request a Certificate of Eligibility for VA Home Loan Benefits
It is possible, actually preferred, to obtain a Certificate of Eligibility through your mortgage lender. If you are ultimately approved for a loan, allow the vendor you choose do the leg work for you. Most, if not all credible lenders have access to the Automated Certificate of Eligibility (ACE) system. ACE is Internet based, and the application can establish eligibility and issue an Online Certificate of Eligibility in a matter of seconds.
You can also go Online and use the VA's EBenefit Web site to access your VA benefit data, and even apply for your certificate. For those who do not have access to the Internet, you can request a Certificate of Eligibility for VA home loan benefits by completing VA Form 26-1880 and submitting it to the VA Eligibility Center along with acceptable proof of service as described on the instruction page of the form.
Page written and maintained by NCCM Thomas Goering, USN (Retired).
