(Jun 7, 2023)
Hundreds of thousands of service members use this loan yearly to buy a place they can call their own, and we will provide you with all the details about VA loans.
What is a VA Loan?
The VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs but issued by a private lender like a bank, mortgage company, or credit union. Because a government agency backs the loan, lenders feel more comfortable offering these loans because they take less risk than a conventional mortgage.
The VA loan is exclusively for military borrowers to buy and refinance homes. Each day of service counts towards your VA entitlement and home loan limit. The dollar amount the VA pays if you default on the loan depends on your VA entitlement.
VA loans are designed to offer a significant source of financial aid to veterans and active service members. Besides buying a home using the loan, you can also use the loan to finance home upgrades and renovations.
VA loans use a unique formula to calculate the applicant's debt-to-income (DTI) ratio, which helps qualifying borrowers afford larger homes or homes with more amenities.
VA loans don't come with credit score requirements. However, additional requirements might vary depending on the VA loan you apply for. If you qualify, you can apply for the loan from a lender of your preference.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Gilchrist County, Florida.
How Does the VA Loan Work?
At first glance, VA loans work the same way as other home loans. You fill out an application and provide proof that you can repay the loan depending on your credit history and earnings.
But for the most part, VA loans are different from conventional FHA loans, especially in the interest charges. You must verify your military service history because the VA home loan benefit is for military borrowers who have served enough time to meet the eligibility requirements.
Unlike most low or zero-down payment programs that require mortgage insurance in Gilchrist County, you don't need insurance with VA loans. However, you will pay of VA funding fee, which is charged to offset the cost of the VA loan program to taxpayers. This is typically rolled on top of the loan amount, so you don't have to worry about paying anything out of pocket.
You can only use a VA Loan if you're buying a home you're going to live in most of the time. You can't use a VA loan to buy a vacation home or an investment property. You can also use the VA loan to build, remodel or make a home more accessible. Unlike USDA Loans, you can use your VA loan benefits more than once during your lifetime.
Who Qualifies for VA Zero Down Payment Loans in Gilchrist County, Florida?
Not everyone qualifies for a VA loan, even if they've served in the military. There are VA loan requirements for income, credit, and assets, and you also need to meet various guidelines for military service.
The requirements may vary slightly because the lenders set their requirements. However, VA loans have more lenient credit requirements overall than other mortgage programs.
To qualify for a VA loan, you must meet at least one of the following criteria:
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You've served 181 days of active service during peacetime.
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You've served 90 consecutive days of active service during wartime.
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You've served over 6 years with the reserves or National Guard or 90 days under title 32, with at least 30 consecutive days.
- VA loans are also available to spouses of service members who lost their lives in the line of duty or have a service-connected disability. However, additional exceptions and requirements exist.
Why Are VA Loans Valuable?
VA loans have helped millions of Veterans, military families, and service members make their dream of owning a home a reality. VA loans use soared since the Great Recessions.
These loans are arguably among the best and most convenient for the applicants and lenders. Some of the benefits of VA loans include:
No Down Payment
This is the largest upside of a VA loan. You can purchase the home without a down payment. This is a huge advantage considering down payments require a significant amount that you have to spend years saving for.
Typically, a military borrower would need to come up with $12,500 for a conventional loan and $8,700 for an FHA loan which is quite substantial for the average military borrower. With a VA loan, qualified borrowers can finance 100% of the home's value without putting down a dime.
No Private Mortgage Insurance
Private Mortgage Insurance (PMI) is necessary to protect lenders against borrower default. In most cases, the borrower is expected to pay PMI if they can't put down at least 20% of the home's value.
VA loans don't require monthly mortgage insurance. No PMI means veterans save substantially in mortgage insurance costs over the life of their loans. Also, no PMI allows Veterans to preserve their savings and stretch their buying power.
Competitive interest rates
VA loans have the lowest average fixed rates on the market. On average, VA loan interest rates are 0.5 to 1% lower than conventional rates. The lower rates save Veterans money every month over the loan life.
Manageable credit requirements
The Department of Veteran Affairs only oversees the loan program but doesn't issue loans. The agency doesn't set or enforce the credit score minimums. The lenders use credit score benchmarks to assess the borrower's risk of default.
The credit score cutoffs can vary depending on the lender, but the minimums are generally lower than those for conventional mortgages.
With VA loans, Veterans don't need anything near perfect credit to secure home financing at competitive rates.
Closing Cost Limits
All mortgages come with fees and closing costs. But the VA limits what Veterans can be charged in closing costs. According to VA guidelines, some of the costs must be covered by other parties in the transaction. These regulations make homeownership more affordable.
VA loan borrowers Gilchrist County can ask the seller to pay all the loan-related closing costs and up to 4% in concessions to cover insurance, prepaid taxes, collections, and judgments, among others. Although there are no guarantee sellers will agree to the request, Veterans can ask during the negotiation process.
Lifetime Benefit
Most people believe VA loans are a one-time benefit – they're not. Veterans who qualify for the VA loan can use this program repeatedly. The benefit never expires. Also, you don't have to pay back your VA loan in full to use your benefit again.
It's also possible to have more than one VA loan simultaneously with second-tier entitlement even when you PCS across the country.
No Prepayment Penalties
With most types of loans, paying off before it matures triggers a prepayment penalty because lenders miss out on additional opportunities to collect interest payments. With VA loans, you can pay off the home loan at any point without worrying about the prepayment penalty.
Foreclosure avoidance
VA loans are among the safest loans on the market. They have emerged as a safe harbor for Veterans because the VA has also done an incredible job of advocating for Veterans in jeopardy and working to ensure they stay in their homes. The program isn't just about getting you into a home but also focuses on helping you keep it.
Variety of Loan Types
You have multiple financing options under the VA loan program. Not only can you use the loan to buy a home, but you can also use it to make energy-efficient upgrades, take equity out of the home and refinance into lower rates or renovate the house. The different VA loan options available to you include:
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VA purchase loans – Veterans' most commonly used financing option. It is ideal for buying the primary residence.
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VA Interest Rate Reduction Refinance Loan (IRRRL) – Also called VA to streamline refinance, this type of loan is excellent for Veterans that want to lock into a lower interest or refinance out of an adjustable-rate VA loan. It is only available for Veterans with active VA loans.
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VA cashout refinance – For veterans who want to take out equity from their home in return for cash. You can use this money to pay off debts, make home improvements, or have an emergency. You can also use this option to refinance non-VA mortgages.
- VA Energy Efficient Mortgage (EEM) – This option is for homebuyers looking to reduce the cost of their utilities like heating and cooling. You can finance any qualified energy-efficient improvements into their loan.
How to Apply for a VA Loan in Gilchrist County, Florida
Here are the steps you should follow when applying for a VA loan if you're sure you meet the eligibility requirements.
Obtain a Certificate of Eligibility (CoE)
The first step is obtaining a Certificate of Eligibility (CoE) which shows the mortgage lender that your military service meets the requirements for a VA loan. A VA-approved lender can get the document for you, or you can request the certificate from the VA online or by mail.
Find the right lender
Finding the right lender is critical. Some VA lenders are suited for borrowers with weaker credit, while others offer a wider variety of VA loan types. Try and get pre-approved with more than one VA mortgage lender, which allows you to compare qualification requirements and mortgage rates.
Find a home
The home you want to purchase with a VA loan must meet minimum property requirements to ensure its clean, safe, and structurally sound.
Once you identify the house you want, the lender will evaluate your finances and order a VA appraisal to verify the home meets all the requirements. Once the applications and appraisal are approved, you can close on the loan and move into the house.
Can You Refinance with a VA Loan?
It's possible to refinance a VA loan, and you have two options when refinancing a VA loan. You can reduce the interest rate with the VA streamline loan (IRRRL) or extract equity with a cash-out refinance.
VA Streamline refinance
You can choose the VA Streamline to refinance if you:
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Already have a VA mortgage
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You want to refinance to a lower interest rate to save money or refinance to a fixed-rate mortgage from an adjustable-rate mortgage.
- Don't want to take out any cash from home equity.
VA Cash-out refinance loan
The VA cash-out refinance loan is ideal if you:
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You have a conventional or VA loan
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Want to extract cash from your home equity
- You can pay the closing costs up front or with the cash you take out
Why Should You Use Your VA Loan to Buy a Home in Gilchrist County, Florida?
Gilchrist County, Florida, is among the best places to live if you're looking for a quiet, conservative neighborhood.
The county is also flooded with amenities, including parks, gyms, dozens of grocery stores, cafés, and restaurants spread across the four cities of Trenton, Bell, Spring Ridge, and Fanning Springs.
Affordability
The median price of homes in Gilchrist is $370,000, and the median listing price per square foot is $202. This is slightly lower than the national average of $374,000. But what makes homes in Gilchrist more affordable is that they come with larger lots, giving you more bang for your buck.
Because the county is a buyers' market, it's not unheard of for houses to sell below their listed price, giving you more room to haggle.
Schools and amenities
Gilchrist County is rich in amenities and schools. The county has exceptional public schools, including Trenton Elementary School, Bell Elementary School, and Gilchrist Virtual School.
The county also has numerous grocery stores, pharmacies, restaurants, and cafés. The county also has multiple parks for families looking to spend quality time together.
Community
As a veteran or service member, you will love that there are other Veteran families. Gilchrist County has more Veterans from various war eras than the national average. If you're looking for a community with like-minded individuals with similar experiences, you will love what Gilchrist County offers.
Attractive real estate isn't the only reason you should use your VA loan to buy a home in Gilchrist County, Florida.
Besides the vast selection of amenities, including restaurants and cafés, there's also a great deal of things to do in Gilchrist County, Florida. The county also has a vibrant and balanced outdoor scene, making it ideal for families looking to settle.
Ginnie Springs
Ginnie Springs is a privately owned park incorporating various family activities. The springs feature camps, diving, and soaking in hot water springs.
The springs offer three primary methods of relaxing and interacting with nature. You can float around the seven crystal clear springs 72 degrees all year round using the kayaks, paddleboards, canoes, and innertubes available at the springs.
You can enjoy the vast outdoors with over 200 wood acres and spring-side tent sites at your disposal. You can also set up a tent by the river or bring your RV for a fully electric and water hookup. You can also enjoy the underwater experience characterized as the world's favorite freshwater dive.
Get to experience the clear water and startling natural beauty of the underbelly of the springs. While here, you can also visit the famous Devil's Ear spring system for Scuba diving.
Location - 7300 Ginnie Springs Road, High Springs, FL 32643, United States
Fort Fanning Historical Park
Fort Fanning historical park is preserved and hidden in the Fanning Springs. The fort is named after Colonel Alexander Fanning, an army officer who was a fixture in Florida during the Seminole Wars.
The park sits on the banks of the beautiful Suwannee River in Fanning Springs. Besides the history-packed museum, the park has a community center, playground, resting benches, and a paved walking trail from the river to the Nature Coast State.
Location - 9930 Kentucky Ave, Fanning Springs, FL 32693, United States
Apply for your VA Loan Today and Enjoy the Serene and Quiet Community of Gilchrist County, Florida
Gilchrist County has just the environment that families escaping the busy life of cities are looking to step away from. With exceptional schools, more than average lots, and exceptional springs, the county has everything you need to create a relaxing and convenient environment for your family.
With your VA zero down payment, you can purchase your primary home in Gilchrist County without decimating you're your savings. Apply for your VA loan now and enjoy the beauty and serenity that Gilchrist has to offer.
(Jun 7, 2023)
