Contrary to what many Americans think, it's a very good time for servicemembers to refinance or purchase a home. With mortgage rates continuing to hover at all-time lows and many homes selling at significantly discounted prices, it's possible for those with good credit and income to purchase a great home.
One of the unique benefits afforded to military personnel is access to the Veterans Affairs Home Mortgage Loan program. This program offers tremendous mortgage benefits to active-duty servicemembers, veterans, and some surviving spouses. A VA home loan can be used for a number of purposes, including purchasing or building a new home, refinancing a current mortgage, repairing or improving your existing home, or installing home efficiency measures.
While a conventional loan might seem like a great bargain because of an advertised lower rate, keep in mind that you often need a high credit score of 720 or above to qualify for these best rates. VA home loans are backed by the government, meaning banks can assume less risk with the loan and possibly price it lower than a rate you would qualify for from a bank. But even without a lower rate, there are a number of other compelling benefits that make the VA home loan program a better overall alternative.
Starting the Process
You can begin the application process at any lender that offers a VA home loan. At some point, you'll be required to obtain a Certificate of Eligibility. This document will verify that you're qualified for the program and outline your benefits level. Potential borrowers can go online to https://vip.vba.va.gov to apply for the program and obtain their COE.
Once you have determined your eligibility, you can move forward with the home buying process. This generally involves finding a VA-approved lender (if you haven't already), pre-qualifying for a loan, choosing a home, having it appraised, and then closing on the loan and property.
For more information about using your VA Loan to buy a home, visit Military.com's VA loan section.
Ethan Ewing is a veteran consumer financial services and online marketing executive. He manages all aspects of Bills.com, a leading consumer finance website that provides practical financial advice and free financial tools and resources. Ethan is a driving force behind Bills.com’s growth. He has held leadership positions at two Experian companies and built a lead generation business for Ameriquest Mortgage. He holds a BA from Denison University.
On 29 September 2014, the Federal Register published a proposed rule titled Limitations on Terms of Consumer Credit Extended to Service Members and Dependents. In this proposed rule, the Department of Defense (DOD) hopes to extend the current restrictions on how much interest military members and their dependents can be charged when they borrow money. This […]