Is a VA Loan Right for You? Everything You Should Know Before Applying

Service members across the United States are awarded several amazing benefits for their time enlisted in the military. While many people discuss pay allowances, retirement benefits, healthcare coverage, and tuition support and reimbursement, there is one additional benefit that individuals considering the purchase of a new home should consider. 

Eligible service members are eligible to apply for a VA loan, which helps them secure a home loan during or after their service. However, some service members may have heard negative things about these loans, which makes them nervous about applying. While there may be many myths about these loans, understanding them can help you determine whether it is right for you.

If you’re considering applying for a VA loan, keep reading to learn more about how to qualify and the advantages of choosing this instead of a conventional loan. 

What is a VA Loan? 

In 1944, President Franklin D. Roosevelt signed the G.I. Bill of Rights into law. The bill was designed to help veterans transition back to civilian life after World War II. As a part of the Bill of Rights, the VA home loan program was established, helping veterans across the United States gain access to housing. 

VA loans are loans that the U.S. Department of Veterans Affairs backs. Unlike some other mortgage loan options, these loans often don’t require a down payment, which can make it much easier for buyers to move into a property. However, homes purchased with these loans are subject to a VA appraisal, which may limit your housing options in some markets. 

Who is Eligible for a VA Home Loan? 

While military service is a requirement for an individual to qualify for a VA loan, this isn’t the only requirement. You must be an active-duty military member or a veteran who meets the length-of-service requirements. You may also be eligible for a VA loan if:

• You have served in the National Guard or Reserves for at least six years, or 90 days of active duty service under Title 32 orders.
• You are the surviving spouse of a service member who passed away while on active duty or from a disability caused by their service. You are only eligible for this loan if you have not remarried until after the age of 57 and after December 16, 2003. Additionally, the spouses of prisoners of war and service members who are missing in action are eligible.
• You meet your lender’s unique income and credit requirements. While the VA doesn’t require a minimum credit score or income, your lender retains the right to set their own standards. They may also evaluate your debt-to-income ratio to determine whether you are capable of repaying the loan. 
• Your chosen property meets current safety standards and local building codes, and will be your primary residence. You may also need to occupy the property within 60 days; however, this timeframe can be extended for various circumstances, including essential property repairs or an impending retirement. 

The Advantages of These Loans

If you are considering applying for a VA loan, there are several unique advantages that you will appreciate that conventional loans don’t offer. These advantages include: 

• Little to no down payment, which can make it easier for service members to move into a new home, even after active duty service.
• No need for private mortgage insurance, which may cost you thousands of dollars across the lifespan of the loan. 
• More competitive interest rates than if you were considering applying for a conventional home loan. 
• Limited closing costs set by the VA, or a chance that the seller is responsible for paying these costs.
• No penalties if you pay off the loan early, which can save you thousands of dollars in interest and increase your equity.  
• Financial counseling for individuals experiencing temporary financial difficulties that may complicate loan payments. 
• Additional housing grants are available if you were disabled during your active duty service. 

Appraisal Requirements for Your VA Loan

Before you can purchase your home with a VA loan, it is essential that you go through the VA appraisal process. When buying a home with these loans, some requirements include: 

• The home must be structurally sound, including a reliable roof and walls, and must not have a presence of wood-destroying insects, such as carpenter ants and termites. 
• A lead-based paint test is required if the home was built before 1978. Additionally, chipped and peeling paint must be repaired. 
• Easily accessible and properly vented attics and crawl spaces, as well as proper access to safe, potable water and sewage. 
• Year-round access to the property from a private or public street to ensure access for emergency services, including police and fire. 
• All mechanical and electrical systems must be in good working order and should not present any hazards to homeowners. 
• The home should not encroach on any surrounding property lines, as this poses a risk to lenders and borrowers. 

Is This Loan Right for You?

While a VA loan isn’t right for everyone, it may be right for you if you. If you are an eligible military member looking to purchase a home with little to no money for a down payment and are seeking a new primary residence, this is the ideal choice for you. If you are on the fence, don’t hesitate to contact a trusted real estate agent. 

They can help you assess the current market conditions, your financial situation, and your housing wants and needs to determine whether a VA loan is the right choice for you. With many options on the market, they may also have an idea as to whether a different mortgage loan option is a better fit for your circumstances. 

Let Premier Utah Real Estate Help You Find Your Right Loan

If you are considering purchasing a home with a VA loan, don’t hesitate to turn to our team at Premier Utah Real Estate for support. We can help you find the perfect home for your family that meets the unique requirements established by the VA. Whether this is your first home or you’re trying to move into a larger property, we’re here to help you turn your dreams into a reality. 

When you’re ready to purchase your new home, don’t hesitate to contact us.