Protecting your country in good times and bad should come with some benefits beyond sleeping on a cot and eating MREs. The United States Department of Veteran’s Affairs (VA) guarantees a home loan product made just for you. Let us help you find the VA Loan that’s right for you, right now. Don’t want to wait? Go ahead and contact us at home loans and we’ll do this thing together.
VA Mortgage Basics
VA loans are one of the perks of honorable military service, giving vets a chance to own a home of their own after a certain amount of service during war or peace time. Although not made by the Department of Veterans Affairs, the department does insure a large percentage of the value of each of these notes. This allows vets to get a break on terms like interest, down payments and even mortgage insurance, saving them a bundle over the life of their loans.
Both active duty and retired military are eligible for a VA loan after a set period of time, based on their service period. For example, Gulf War vets are required to serve at least 90 days of active duty or to fully complete the term they were ordered to active duty for without a dishonorable discharge. That group includes vets that were in service from August 2, 1990 until the present. There’s a full list of VA loan eligibility for the curious here.
Helpful Terms for VA Mortgage Applicants
- Amortization: This is a way of paying off debt using payments that consist of both principal and interest. In most cases, a fixed repayment schedule is agreed upon by both the borrower and the lender, and the amount of interest paid during each interest paying decreases over time. That means that as you go on, a higher percentage of each payment goes to paying off the principal.
- Loan to Value (LTV): This is a way that lenders calculate risk before deciding to give you a loan. To calculate LTV, a lender will usually take the amount of a potential mortgage and divide it by the appraised value of a home.
- Loan Term: The term of a loan, or loan term, is the amount of time for which a loan agreement remains in force. At the end of the loan term, the loan should either be fully repaid or refinanced into a new loan.
- Principal: This is the amount of money originally borrowed from the lender. Monthly payments consist of principal payments combined with interest (as well as the payment of fees, taxes, and other expenses.) As the borrower pays off the principal, it will grow smaller over time.
- Interest: Interest is a specific percentage of the principal that is paid to the lender. For fixed-rate home loans, this stays the same throughout the entire loan term, but for adjustable-rate mortgages, it can vary based on changes in the market.
- Annual Percentage Rate (APR): This is a calculation of interest, plus the other costs, like points, broker fees, and other charges, that you’ll pay during a year of your loan, expressed as a percentage. Because of this, your APR will almost always be more than your interest rate.
- Down Payment: This is the initial cash payment you’ll make towards buying a home. Fortunately, in many cases, you can get a VA loan without any down payment.
How Big of a VA Loan Can Veterans & Military Personnel Get?
According to the VA there is “no maximum that an eligible veteran may borrow using a VA-guaranteed loan.” However, there are county limits that must be used to calculate the VA’s maximum guaranty amount for a particular county. In other words, there’s no limit to how much you can spend on your new home with a VA loan, but the VA has limits on how much liability it will assume, which can affect the amount of money your lender will let you borrow.
Generally, eligible veterans or military personnel can get loans up to $417,000 with no money down. But that number can be much higher in certain counties that have a higher cost of living. To get started, you will need a copy of your Certificate of Eligibility, by calling the VA customer service at: 800.827.1000.