A mortgage loan made by an approved lender and guaranteed by the Department of Veterans Affairs. They are made available to eligible veterans, those currently serving in the military, and, in some case, their spouses.
A VA loan differs somewhat from a standard mortgage. Even though it is provided through a private lender, the federal government guarantees a portion of the principal. That means that the Department of Veterans Affairs backs the loan, so if the borrower defaults on it, the lender is protected. Borrowers who are eligible for a VA loan are permitted to have a small, or sometimes non-existent, down payment and still get a mortgage. This is the biggest advantage of a VA loan. Be sure to ask your lender what its down payment requirements are when requesting a VA loan.
Some of the requirements for a VA loan are standard, as with any loan: good credit, enough funds for payments, etc. Another is that you must be eligible though your affiliation with the military. To see a full list of eligibility requirements, visit the Department of Veterans Affairs website at www.homeloans.va.gov. This site also answers many specific questions about the program.
When requesting a VA loan, you need a certificate of eligibility to show the lender. You can get this certificate through the Department of Veterans Affairs. Upon providing it to the lender, the lender can then help you.
Chris Lamm Mortgage Planner, NMLS ID 209221
Dear Chris,
My wife, Heather, and I are trying to get an estimate of how mortgage rates vacillate by using the GI bill. I know we’re eligible to borrow a certain amount of money (depending on credit risk) at a certain rate for a certain time. What we’d like to know is a simple generic formula to go by. For example, a $300,000 home w/ no down vrs the same home w/3 % down vrs the same home with 10% down would look HOW on a piece of paper: 0 down = highest monthly payment and the 3% next highest and 10% lowest — but dollar figure wise are we talking $400 more a month or more or less from 0 down to 10 down, for example.
I imagine there are other factors involved, i.e. mortgage insurance, etc. but we’d appreciate any illumination you could provide us BEFORE we jump into the stream. Thanks, Chris.
Ron Wright