What Are VA Loans?
The VA loan is a $0 down mortgage option available to Veterans, Service Members, and select military spouses.
VA loans are issued by private lenders, such as a mortgage company or bank, and guaranteed by the U.S. Department of Veteran Affairs (VA).
Here’s what you need to know about the 4 different types of VA loans:
VA Purchase Loan
Veterans and Service Members can use the VA Loan to purchase new or existing homes with $0 down payment.
VA purchase loans also allow Veterans to buy single-family homes, condominiums, manufactured homes, and multi unit properties (like a duplex).
Policies and guidelines can vary by lender. Some lenders may not make all of these types of VA purchase loans.
IRRRL Loans
The VA Interest Rate Reduction Refinance Loan (IRRRL) is one of the VA loan programs refinancing options.
These are simple, low-cost refinance loans that, in some cases, might not require credit underwriting, income verification, or an appraisal.
The VA IRRRL is only for Veterans who currently have a VA loan. They require that your new rate is smaller than your old rate and have a limit on the time it takes to recoup the costs and fees.
VA Cash-Out Refinance
The VA Cash-Out Refinance allows qualified homeowners to refinance their mortgage and take out cash from their homes equity. These loans are open to Veterans with or without current VA loans.
Qualified homeowners can typically refinance up to 90 percent of their homes value.
Lending guidelines and loan to value requirements can vary by lender.
Homeowners are not required to take out cash with these loans, which means Veterans with non-VA mortgages can use this option as a basic rate-and-term refinance.
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.
Veterans can finance up to an extra $6000 to cover the cost of qualified improvements, like storm or thermal windows, heat pumps and solar heating and cooling programs.
Homeowners can’t use this option to purchase appliances, window air conditioning units, and other non-permanent additions.
Should I get a VA Loan?
The VA loan program has helped generations of Veterans, service members, and military families achieve home ownership.
VA Loans are arguably the most powerful loan option on the market. They have big-time benefits, including $0 down payments, no mortgage insurance, flexible credit guidelines, and the industry’s lowest average fixed interest rates.
Every veteran buyers situation is different, and going over your loan options with a lender will ensure you make the best financial decision possible.
Talk with a trusted lender that knows VA loans and how to get the most from this hard-earned benefit.
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