What are VA Purchase Loans?
VA purchase loans are designed to help veterans, active-duty service members, and their spouses finance the purchase of a home. The Department of Veterans Affairs guarantees this loan program for those who are eligible.
The VA determines eligibility and issues a certificate as proof to qualifying applicants. Once this certificate is obtained, it is required to be submitted to the mortgage lender of choice.
Those who qualify can take advantage of competitive interest rates, as well as flexible qualifying guidelines, and no down payment.
Key Benefits of VA Purchase Loans
When people take out a VA Purchase Loan they can take advantage of several benefits including:
1. Reduced upfront costs:
Since there is no down payment required, borrowers can use their cash for other expenses such as movers or furniture when moving to a new home. This can be extremely helpful, especially for veterans who may be trying to get back on their feet.
3. Flexible qualifying guidelines:
The VA will not require a minimum credit score requirement and many lenders that may require a minimum credit score will have flexible guidelines. This is ideal for those with less-than-perfect credit.
2. Streamlined process:
With a VA Purchase Loan there is less paperwork and a faster closing process. This is beneficial for veterans or active-duty service members who are looking for a new home in a short amount of time, allowing them to move in faster than would otherwise be possible through traditional loan methods.
4. Competitive interest rates:
VA Purchase Loans typically have lower interest rates than conventional loans. This is a major draw that borrowers can benefit from for the life of the loan.
VA Purchase Loan Eligibility
Veterans who meet minimum service requirements: The service requirements depend on when you served. For a complete breakdown, you can visit the Department of Veterans Affairs. Here you will find a detailed list of service days to see if you meet the minimum service requirements.
Active-duty service members: Those who have served for at least 90 continuous days (all at once, without a break in service), meet the minimum active-duty service requirement.
Certain surviving spouses of veterans: Certain circumstances will allow spouses of veterans to be eligible for a VA Purchase Loan. Consult the Department of Veterans Affairs to see if you are eligible.
How to Apply for a VA Purchase Loan
Applying for a VA Purchase Loan is easy. Pre-qualification is recommended to determine loan amount eligibility. Once you have done this and have gathered the required documents, such as military service records and proof of income, you can begin to work with a VA-approved lender to complete the application process.
When you choose to work with Raleigh Mortgage Group for your VA Purchase Loan, our team can navigate the process with you so that you can obtain the best rate possible. We can help you to complete the application process as you look for low rates; as we have helped countless veterans and active service members obtain purchase loans for their homes. Let us help you!
FAQs About VA Purchase Loans
What are the credit score requirements for a VA Purchase Loan?
While the VA does not set a minimum credit score for VA Purchase Loans, many lenders typically will. Most leaders will require a FICO score of at least 620. Some may accept scores as low as 500. It’s best to check with your lender to see where you stand.
Is there a limit on the amount I can borrow with a VA Purchase Loan?
There is no limit on how much you can borrow with a VA Purchase Loan if you have full entitlement. You can borrow up to the reasonable value of the property or the purchase price, whichever is less.
Can I use a VA Purchase Loan to refinance my existing mortgage?
Yes, a VA purchase loan can be used to refinance a mortgage. The Department of Veterans Affairs offers several programs that allow eligible veterans and their families to refinance their homes. Reach out to them to see what you may be eligible for.
What are the closing costs associated with a VA Purchase Loan?
The closing costs associated with a VA Purchase Loan can include several fees such as:
- Funding fee: This fee is paid to the U.S. Department of Veterans Affairs to fund the VA loan program. The fee can range from 0 to 3.6% of the original loan amount and may be financed.
- Origination fee: This is a fee the lender charges to cover the processing of the loan application. It can be up to 1% of the loan amount.
- Notary fee: The escrow company may charge for signing documents with a notary.
- Recording fees: This government fee is paid to state and local offices to record the deed and other mortgage-related documents.
- Appraisal: This is paid for a property appraisal to determine its value and ensure that it meets the VA’s Minimum Property Requirements.
- Credit Report: A fee paid for a credit report.
State and local taxes can also be part of the closing costs associated with a VA Purchase Loan.
How long does it take to close on a VA Purchase Loan?
A VA Purchase Loan typically closes in 30-50 days. The exact time will depend on the lender, borrower, housing market, and appraisal and underwriting processes.
Rely on Raleigh Mortgage Group for All Your VA Purchase Loans Needs!
Raleigh Mortgage Group currently represents a number of VA lenders. We can explain the process to you and help you achieve the best rate possible. We can also help you better understand the eligibility for other various VA loan programs.
Raleigh Mortgage Group represents many VA lenders and has experience helping veterans and active duty service members obtain VA Purchase Loans.If you are a veteran or active duty service member and are VA eligible, call Raleigh Mortgage Group at 919-866-0212 to speak with a VA loan specialist today.