What Is A Veteran’s Affair (VA) Loan?

A VA home loan is actually a guarantee rather than a loan. The VA does not actually lend the money to the borrower, but promises to make good to the lender should the borrower default on the loan. This promise from the government helps many people get loans that they might not otherwise be able to get.

A VA loan also comes with some very helpful and cost saving aspects. Many veterans may not know that a VA loan carries with it caps for closing costs which can save the borrower a lot of money at closing time. The VA also allows for some leniency to qualified VA borrowers who are having temporary financial problems.

Some of the other benefits that a VA home loan offers include such things no private mortgage insurance, no down payment for certain cases, higher cash out refinances, and accurate assessments of the property value for the planned home.

There are some issues that VA loan borrowers should be aware of as they go through the process of buying a home. For example, when you buy a home through a VA home loan, the VA does not offer any type of guarantee that the house is free from defects. The VA will certainly do an appraisal of the property, but this should not be taken as an official inspection of the property.

In addition, the VA does not require or even order builders to correct problems or defects that they (the VA) or you may find during the building of a property. That is your responsibility. In fact, you should always get an expert to inspect the house in an official capacity as it is being built (in new home construction projects) or as is with standing homes.

The VA will not be able to offer legal advice either. You, as the buyer, must use your own attorney for those matters. It is your responsibility to be aware of the laws that govern your deal and your property. Even with these restrictions, the VA still offers a great deal for many veterans.

A VA loan can also be a flexible loan. In addition to helping secure loans for standing homes and for building new homes.

In order to qualify for a VA home loan, the borrower must be within a certain debt ratio and credit score. As you might imagine there are many other factors that will also be used to measure your creditworthiness and the more issues you can resolve before applying the better.

I offer $500 as a lender credit for all active and retired milatary – Dawn Kornovich