One of the more popular ways to buy a home is through a VA loan. The VA loan is an alternative to the more traditional mortgage. The difference between these two types of loans is that the VA version is tailored to provide financial aid to people who have served in the military (active or reserve) and veterans. Although anyone can use this type of loan, veterans most frequently use them to attain their first home. Before buying your dream home, you should know a few key facts about this type of loan.
Who Uses A VA Loan?
- Anyone who has served in the military can qualify for a VA home loan. This includes soldiers who have served in active duty and soldiers who have only served in a reserve capacity.
- All veterans can utilize a VA home loan, regardless of where they live; for instance, you can apply for VA home loans Denver-based even if you serve in a completely different place.
- Military spouses and their surviving spouses are also eligible (regardless of when they served).
The eligibility requirements vary slightly based on how long you served in the military. However, each category is eligible for the same benefits, including a tax-free loan that has no set repayment schedule.
What are the Benefits?
The VA loan is a great option for people looking for a simpler alternative to a conventional mortgage. The main reason so many people choose the VA version is it has several different tax benefits when you compare it to other loans. Some of these benefits include:
- The amount you can borrow will be based on your financial needs and your current income. You will not have to make the minimum monthly payment.
- There is no set term, but you can pay the loan back in 15 years or less. However, you could end up paying back much more than what you originally borrowed if you default on your payments.
- VA loans are often offered at low-interest rates. This makes them a great option for people who want to purchase a home and can afford to pay off their loans early to save money each month.
How to Qualify for the Home Loan
When you are trying to qualify for your VA loan, there are two main things that you need to meet. First, as mentioned above, you will need to be a veteran or military personnel to qualify. Second, you will have to complete a certain set of income requirements (depending on whether you are purchasing your property with a cash-out refinance or an interest-only loan).
To qualify for a VA loan, you will also have to fill out a VA home loan application. This application is fairly simple and is usually completed online. If you have any questions regarding the process of applying for the loan, you should contact your local VA office or mortgage broker.
If you are buying your property with a cash-out refinance, you will also have to fill out a VA home loan application, although this application is different from the one you would use if purchasing your property with a VA loan. In many cases, the process is much simpler for those buying their home with a cash-out since you will not be filling out an application. Instead, your lender will send all necessary documents directly to your local VA office.
Conclusion
The VA mortgage is a great option for anyone who wants to buy their first home and avoid paying interest on your loan. The loans are more flexible than other types of mortgages, and they can help you save money throughout the lifetime of your loan.
