As one of Colorado’s leading VA home loan providers, we often hear from people seeking information about VA home loan eligibility. If you are in the market for a home and believe that you might be eligible for a VA home loan, we encourage you to do your homework! The VA home loan program offers some of the most attractive financing on the market today. Before we get into the benefits of a VA home loan, let’s take a closer look at eligibility requirements. Am I Eligible for a VA Home Loan? In order to obtain your Certificate of Eligibility for a VA home loan, you must meet one of the following requirements:
- Have served 181 days, active duty, during peacetime
- Have served 90 days, active duty, during wartime
- Have served 6 years in the Reserves or National Guard
- The spouse of a service member who was killed in the line of duty
If you do in fact meet one of these VA home loan eligibility requirements, you can work with a VA loan specialist to obtain your Certificate of Eligibility. The Benefits of a VA Home Loan Now that we have established your VA home loan eligibility, why should you choose a VA home loan over a conventional mortgage? There are many benefits to the VA home loan program including: No Down Payment Unlike traditional mortgages, VA home loans do not require a down payment; unless you opt for a VA jumbo loan. FHA loans require a minimum 3.5% down payment while conventional mortgages require at least 5%. It’s impossible to stress enough just how incredible it is that VA loans do not require a down payment. Should you opt for a VA jumbo loan, a loan in excess of $417,000 in most counties, you will only will only be required to pay a down payment on the amount of the loan that exceeds $417,000. Learn more about VA jumbo loans. No PMI Not only will you save money in terms of a down payment with a VA loan, you will also avoid costly Private Mortgage Insurance (PMI). Because VA loans are backed by the US Department of Veterans Affairs, those who take advantage of these loans do not have to pay PMI. Other types of mortgage products require the homeowner to pay PMI until they have at least 20% equity in the home. Meaning, unless a homebuyer puts 20% down at the time of the purchase of their home, they must pay PMI until they have 20% equity. It is not uncommon to pay upwards of $100 a month for PMI. Relaxed Credit Restrictions Yet another incredible benefit of the VA home loan program is relaxed credit restrictions. While many lenders have expanded credit requirements since the recent financial downturn, the VA home loan credit requirements have remained relaxed. Today VA lenders are looking for a credit score of at least 620 while conventional lenders are looking for a minimum score of 740. These are just a few of the many benefits of the VA home loan program. If you are ready to apply for your VA home loan eligibility, we encourage you to contact us today! Allow us to help you claim your piece of the American Dream!