VA loans are made by lenders such as bank and mortgage companies. The loans have some amazing benefits and in some ways are very similar to conventional financing. VA loans are made for eligible veterans, the loan is guaranteed, the guaranty means the lender is protected against loss, this means for the veteran a high quality loan and some of the lowest interests in the market.
Benefits of VA loans
- True 100% financing (there is no down payment required)
- Flexible credit guidelines
- No mortgage insurance
- No income restrictions
Am I Eligible?
- Veterans who served on active duty and have a discharge other than
dishonorable after a minimum of 90 days of service during wartime or a
minimum of 181 continuous days during peacetime. - 2 years requirement if the veteran enlisted and began service after
September 7, 1980 or was an officer and began service after October 16,
1981 - 6 year requirement for National guards and reservists with certain
criteria and there are specific rules concerning the eligibility of
surviving spouses - If you are now on regular duty (not active duty for training), you
are eligible after having served 181 days unless discharged or separated
from a previous qualifying period of active duty - If you are an unremarried spouse of a veteran who died while in service or from a service connected disability
- If you are a spouse of a service person missing in action or a prisoner of war
- A surviving spouse who remarries on or after attaining age 57, and on or after December 16, 2003, may be eligible
Is There A Streamlined VA Refinance?
Yes, it s called an IRRRL, which stands for interest rate reduction refinancing loan. There are items you need to know about the VA IRRRL:
- No appraisal or credit underwriting package is required by VA. Even if you owe more on your loan than the home is worth,
contact us. - A streamlined VA refinance loan may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs. (Remember:
The interest rate on the new loan must be lower than the rate on the old loan unless you refinance an ARM to a fixed rate mortgage). - You must NOT receive any cash from the loan proceeds.
- A streamlined VA refi can be done only if you have already used your eligibility for a VA loan on the property you intend to refinance. It must be a VA to VA refinance, and it will reuse the entitlement you originally used.
- The occupancy requirement for a streamlined VA refinance is different from other VA loans. When you originally got your VA loan, you certified that you occupied or intended to occupy the home. For a streamlined VA refinance you need only certify that you previously occupied it.
- The loan may not exceed the sum of the outstanding balance on the existing VA loan, plus allowable fees and closing costs, including funding fee and up to 2 discount points. You may also add up to $6,000 of energy efficiency
improvements into the loan. Adding all of these items into your loan may result in a situation in which you owe more than the fair market value of the house. - No loan other than the existing VA loan may be paid from the proceeds of the VA streamlined refinance. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage.
If you want to learn more about VA mortgage financing fill out the contact form below and one of our VA specialists will get in touch with you as soon as possible.
