A Comprehensive Overview Of VA Loans For Lenders

VA Loan Guidelines for Lenders? What's that? A Veterans Affairs (VA) loan is a $0 down mortgage option available to Veterans, Service Members, and select military spouses. VA

Loans are issued by private lenders, Mortgage Lenders, or banks and are guaranteed by the U.S. Department of Veterans Affairs.

Probably used by your grandfather or great grandfather, the VA Home Loan was created near the end of WWII by the United States government to help to return service members purchase homes without needing a down payment or excellent credit, and it's been available to veterans ever since.

In fact, more than 25 million VA loans have been issued, helping Veterans, active duty military members, and their families purchase or refinance a home.

"VA housing assistance can help Veterans, service members, and their surviving spouses to buy a home or refinance a loan. We also offer benefits and services to help you build, improve, or keep your current home." – va.gov

The VA Loan Process is no different than any other mortgage loan, except VA Loan Eligibility has to be verified. And the VA Loan Benefits are enormous. $0 down payment!

let's outline all of the benefits:

• Easier Qualification – With VA backing, it's easier for veterans and other eligible individuals to qualify for a loan, which they otherwise wouldn't
• Lower Rates – Guarantees from the VA back a VA loan, so the risk to the lender is lower, and the rates are also lower
• Lower Closing Costs – The VA limits closing costs for the borrowers with a VA Loan
• No Monthly Mortgage Insurance – the fact that it's a VA Loan means there is no monthly mortgage insurance
• No Down Payment – It helps to make a down payment, but you can get a VA Loan without making any down payment
• Financing of Funding Fee – the VA requires borrowers to pay an upfront fee, but the cost can be financed and added to the total loan amount
• Assumable Loan – The VA allows a VA Loan to be transferred to another VA-eligible buyer

Different Types of VA Loans

Like other mortgages and loans, there are different types of VA loans for various purposes.

Explore the different loan types available from the Veterans Administration:

• Purchase loan - Looking to buy a home? Find out if you're eligible for a VA-backed purchase loan to get better terms than a private-lender loan.
• Interest Rate Reduction Refinance Loan (IRRRL) - Have an existing VA-backed home loan? Find out if you're eligible for a VA-backed IRRRL to help reduce your monthly payments or make them more stable.
• Cash-out refinance loan - Want to take cash out of your home equity to pay off debt, school, or take care of other needs? Find out if you're eligible for a VA-backed cash-out to refinance loan.
• VA Energy Efficient Mortgage - The VA allows veterans to borrow additional money to pay for energy efficiency improvements to a .home as part of either a home purchase or a refinance.

The VA Loan Process: A Step-by-Step Guide

There is a process to apply for and receive any loan, and a VA Loan is no exception. Here's what you need to do next:

• Find a VA approved lender - Only lenders approved by the U.S. Department of Veterans Affairs may originate VA mortgages. Some lenders focus primarily on conventional loans, but others concentrate on the VA loan program for military clients. A VA lender will be much more experienced and knowledgeable about the VA loan process
• Certificate of Eligibility - Then you need to obtain a Certificate of Eligibility (COE). This proves that you meet eligibility standards for VA loan benefits. It also tells the lender the amount the VA will guarantee.
• Pre-qualifying - This means stating your income, credit history, employment, marital status, debt, and other information. This will give you a rough estimate of the price range for a home you qualify for.
• Find the house - Now you'll get involved in finding a house, making an offer, maybe even (depending on the strength of the market) bidding on a price and submitting an offer. But you need to make sure that your real estate agent knows you intend to use a VA Loan.
• Application and appraisal - If the seller agrees to the conditions you want for the sale, they will sign the purchase contract, and the lender will process the application and order a VA appraisal. The appraiser must be VA-approved.
• Close to the house - The Mortgage Closing legally transfers the property to you, and you assume the mortgage payments. You'll need homeowners insurance and maybe pay some of the closing costs.

VA Loan Guidelines for Lenders. Make It Easy on Yourself.

Any home buying experience can be stressful. And most are. But finding a lending partner who knows the ropes and understands the different steps of a VA Loan can make things a lot easier. And a lender that has the time to spend with you on your hunt and actually educate you about the process is an added bonus. Time is a critical element of that process, and a lender who uses the services of a Mortgage BPO to handle the Mortgage Loan Processing paperwork usually has more time than one that doesn't.