Military members face insurmountable challenges in their career, but buying a home doesn’t have to be one of them if you’re an active service member or veteran. In fact, the Department of Veterans Affairs (VA) has created the VA loan benefit to assist military service members and their families with buying homes throughout the country and Colorado Springs military families can take advantage of the VA loan benefit to help finance the purchase of their next home.
So many people miss out on this valuable benefit and savings because they are uninformed about the VA home loan. It’s one of the best military benefits available! Below is information about VA loans and some interesting things you may not have known about this military entitlement.
Things you may not have known about VA loans
- No money down on the loan.
- No mortgage insurance.
- You can own more than one home at the same time.
- If you’re disabled, there is no funding fee.
- No PMI (private mortgage insurance).
- Closing costs and debt reduction may be paid by the seller.
- You can reuse this benefit.
- You don’t have to be a first-time buyer.
- No early payoff penalty fee.
- VA loans are assumable.
VA loans offer home buyers a low interest rate without requiring a down payment or PMI (private mortgage insurance). The home buyer works with a private lender to obtain financing and VA backs the loan by guaranteeing it. This allows the private lenders to offer the veteran favorable terms with minimal risk. So, the VA guarantee acts as insurance for the lender.
To be eligible for a VA loan, you must have sufficient income, Certificate of Eligibility (COE), and satisfactory credit. Also, the home you plan to buy must be your home of residence. You must have served at least 90 days active duty during wartime, or 181 days active duty during peacetime. Spouses of servicemembers who died during active duty are also eligible for this benefit. For more detailed information about eligibility requirements visit the VA Home Loans Eligibility page of the U.S. Department of Veterans Affairs.
VA Loan Can Be Used More Than Once
Not only is the VA loan one of the most helpful benefits available to military service members, it can also be used again and again. This is helpful for families that PCS often. The only stipulation is that your current VA entitlement must be in good standing. If so, there is no limit to how often you use it.
When you decide to use your VA loan entitlement, make sure you use it at least one year before your ETS (estimated time of separation). This is because a lender cannot predict with certainty what your post-military income will be and there is a greater risk of foreclosure due to job loss.
Multiple VA Loans at Once
Some people are unaware of this, but you can actually finance more than one home at the same time by using a VA loan. This comes in handy for military members in the midst of a transfer or if the current local market conditions are more favorable towards renting versus selling. The new purchase must be the borrower’s primary residence and they must have enough remaining eligibility or they may apply a down payment top make up the difference.
In most parts of the country, the VA benefit guarantees a loan amount of up to $453,100. Anything higher than this amount will require an additional down payment by the borrower.
No Funding Fee for Disabled Vets
All veterans who use a VA loan to buy a home must pay a funding fee unless they are disabled veterans. The funding fee’s purpose is to reduce the VA loan cost to taxpayers because after all, a VA loan does not require a down payment and has no monthly mortgage insurance or PMI. The funding fee is a small percentage of the loan amount and you can either finance the funding fee or pay it in full at closing time. The VA funding fee may be waived if you suffer from a service-related disability or if you did not receive active duty salary or retirement. Also, surviving spouses of a veteran killed in service or from a service-related disability are eligible for this benefit.
Tips about Lenders
The VA provides a home loan guaranty benefit and other programs to help military members buy, repair, build, or adapt a home. Private lenders offer VA home loans. A private lender can be a bank or mortgage company. The VA guarantees a large portion of the loan amount, so the private lender can provide home buyers with a low interest rate and zero down payment on the loan.
Remember, when searching for a lender, USAA and Navy Federal are not the only companies that offer VA loans. USAA and Navy Federal are popular with the military community, but they have a reputation for creating excessive delays, which could affect your closing date. When you find your dream home, you don’t want to risk losing it because it took too long to close on the house! Talk with your Realtor about local lenders who specialize in VA loans. Your overall experience will most likely be better when using a lender who is knowledgeable about the process on a local level.
It’s important to know your lending options as an active service member or veteran. That dream of owning your own home may not seem so unattainable after you see the many financial assistance programs available to you as a military service member.
Individual states offer additional financial resources such as property tax reductions for disabled veterans. It’s a good idea to contact your local VA office to find out what other entitlements you may quality for. You can contact the Colorado Division of Veteran Affairs for more details.
Houses for Sale near Fort Carson
Fort Carson has state of the art living quarters, however, many service members with families prefer Fort Carson off post housing because they need a larger home for their growing family.
You’ll be thrilled to discover that there are plenty homes for sale near Fort Carson, and using your VA loan Colorado Springs will even allow the new construction homes to be surprisingly affordable.
Hiring an experienced Realtor who is well-versed in the VA loan process can help you purchase a home faster without obstacles due to traditional loan requirements. If you’re new to the area and want to learn more about the most popular communities for military families, we can set up tours of the best homes in the area for your price range.