10 things you need to know about VA Loans

10 things you need to know about VA Loans

VA loans come with no down payment, competitive rates, and no private mortgage insurance. The VA loan program is a great program that has allowed more than 21 million veterans and active military families to purchase homes since 1944. However, there are some restrictions and things you need to know about VA loans.

  1. VA Loans are reusable. If you lost a VA loan to foreclosure, defaulted on a VA loan in previous years, or if you currently have a VA loan, you may be able to obtain another one. And, you can use your full VA entitlement over and over again as long as you pay off the loan each time. There are instances when VA borrowers have two or more VA loans active at the same time.
  2. VA loans are only for primary residences. You cannot use a VA loan for the following:
    • Purchase a home in a foreign country
    • Business loans
    • Investment property
    • Farm land where there is no residence occupied as a home by a veteran
    • Purchase a second home
    • Vacant land
    • Co-ops
  3. Types of property eligible for VA Loans:
    • Condominiums and town-homes
    • Mobile homes, also known as manufactured homes
    • Prefabricated or modular homes
    • New construction homes (with at least one-year warranty and must be VA-approved)
  4. VA Loans are not issued by the Veterans Administration – they are guaranteed by the VA for typically up to a quarter of the loan amount.
  5. You may still be eligible for a VA loan despite bankruptcy or foreclosure.
  6. You won’t need to purchase private mortgage insurance (PMI) because your loan is backed by the federal government.
  7. You will need to pay a mandatory VA Funding Fee. The purpose of this fee is to keep the VA program going and is required to purchase and refinance loans. The fee is typically 2 percent and can be rolled into the loan amount. If you have a service-connected disability, this fee may be waived entirely.
  8. There are co-borrower limits.
  9. VA loans don’t have a prepayment penalty. This means you can save tones of money in interest by making extra payments any time you choose.
  10. You may be eligible for a VA loan with a credit score of just 620.

If you have questions about VA loans, mortgages or need assistance with relocating or the purchase or sale of a home in Alaska, contact Military Movers at 907-622-5000.