What is a Va loan?

A Va loan is a mortgage loan program for the service members, veterans, or surviving spouses of veterans by the U.S Department of Veteran Affairs (VA). Such loans are available at low-interest rates with little or no down payment to help these individuals purchase, build, refurnish, improve a house, or refinance.

Who is eligible for a Va Loan?

Almost anyone who has ever served in the Armed Forces is eligible for a VA Home Loan. This includes active members, National Guard members, Reservist, honorably discharged veterans, and even some military spouses.

Can I use the VA home loan for an investment mortgage?

No, this program is for purchasing primary residences that you'll live in. The closest you can get is if you use a home to purchase a VA loan and then wind up renting out that home and buying another. Qualified homeowners can seek a VA Streamline refinance in that case because borrowers need only prove they used to live in the house for this no-frills refinance option.

Are there Closing Costs associated with a VA Loan?

VA loans do come with some of the standard closing costs and fees. These include fees you’d see on most loans, including the cost of appraisal, title search, title insurance, recording fee, and other lender fees.

One fee that is specific to VA loans is the VA funding fee. This one-time fee is paid directly to the VA to help keep the loan program going. The size of the VA funding fee depends on a few factors.

For first-time use, the funding fee is set at 2.3% of the total amount borrowed. The funding fee increases to 3.6% for borrowers who have previously used the VA loan program but can be reduced by putting money down. Veterans who are deemed to be more than 10% disabled are exempt from this fee.

There are a few ways you can avoid paying the VA funding fee out of pocket. You can negotiate to have the seller pay this fee, or you can roll the funding feed into your mortgage and finance it over the life of the loan.

How much money do I need for a down payment on a VA Loan?

Besides the USDA home loan, the VA home loan program is the only mortgage product that does not require a down payment. If you are a qualified veteran, you can purchase a home with zero money down. As a veteran this is a benefit that you have earned!