(Jun 7, 2023)
VA loans are a class of loans that are only available to Service Members, Veterans, and certain military spouses. Contrary to popular thinking, the U.S. government does not issue these loans. Instead, they are offered to eligible applicants by private lenders such as banks and mortgage companies, then insured by the United States Department of Veterans Affairs.
The VA loan program was instituted back in 1944 by the government to help service members returning from war deployments abroad purchase homes, even if they did not have good credit or money to make a down payment.
Since its inception, the program has backed over 25 million separate VA loans, thus helping countless families put a roof over their heads. The program is more relevant and valuable than ever during these difficult times.
In this piece, we'll take a closer look at the VA loan program for home ownership in Osceola County, Florida, exploring the eligibility requirements, what types of loans are covered, and what you need to do to get one. Let's get right into it.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Osceola County, Florida.
Difference Between Traditional Mortgages and VA Loans
Before getting into the inner workings of the VA loan program, it will be helpful to see just how it differs from traditional mortgage options.
Down Payment Requirements
Qualified borrowers seeking VA loans will not be forced to come up with a down payment before accessing their loan. Down payments are usually hefty sums of money, making them a hurdle for people trying to buy property.
With conventional loans, down payment requirements can reach levels as high as 20 percent of a property's value. For example, a home valued at one million dollars might require that you come up with a down payment of 200,000 dollars before a lender gives you a mortgage loan.
Qualification Requirements
Qualifying for VA loans is a by-product of working under the potentially dangerous, generally tricky conditions in the armed service branches. Because it is designed to provide relief to the servicemen and women who have sacrificed for their country, it features a forgiving underwriting protocol that allows people who might otherwise be denied conventional loans access the funds they need to purchase a home.
Under conventional loan terms, the underwriting guidelines are typically much stricter than what VA loan applicants enjoy. Aside from this, they will experience much more demanding down payment and credit score requirements.
Interest Rates
According to Ellie Mae, VA loans offer some of the most competitive interest rates on the open market. VA loans have featured the lowest fixed interest rates for five consecutive years.
When looking into conventional mortgage loans, applicants need excellent credit scores to access loans at affordable interest rates. VA loans provide applicants with low-interest loan options without high credit score requirements.
Private Mortgage Insurance Requirements
Private Mortgage Insurance is a charge typically tacked onto loan repayments to cover the cost of underwriting your loan. Because the United States government underwrites the VA loan program, applicants are not asked to pay PMI charges.
Conventional mortgage loan products will typically add charges to the monthly payments that recipients have to pay. PMI is usually required when applicants take loans to finance 80 percent or more of their property purchase value.
VA Loan Types
There are various types of VA loans available to eligible applicants. These include:
VA Interest Rate Reduction Refinance Loan (IRRRL)
These loans, also referred to as VA Streamliners, are one of two VA refinancing loan options and are the more popular of them. They earned the term 'Streamline' due to their simplicity and low cost, in addition to the fact that they often do not require income verification, prior appraisals, or credit underwriting.
This loan type is only available to eligible veterans with an outstanding VA loan. It is designed to offer recipients the greatest possible benefits by insisting that the new payment rates are smaller than the previous ones and that the fees and costs associated with the loan are paid back within a specific time frame.
VA Cash-Out Refinance
This loan is available to all Veterans whether they have a pre-existing VA loan on their books. This loan allows recipients to take cash out of their property's equity and refinance the terms of their mortgage. Homeowners that qualify for this loan can theoretically take out loans of up to 90 percent of their property's value.
Loan-to-Value requirements and lending guidelines regarding these loans are not set in stone and can vary depending on the lender in question. Homeowners are not compelled to take cash-out to refinance loans in cash, allowing them to use them as typical rate-and-term refinancing instruments.
VA Purchase Loans
This is the primary meat-and-potatoes loan offered by the VA and is the most popular one with service members and veterans. This type of loan can be used to acquire new or currently existing properties without putting a down payment down. They allow recipients to purchase condominiums, single-family homes, multi-unit properties, manufactured homes, or even start up new constructions.
VA Energy-Efficient Mortgages
As part of the government's efforts to encourage environmental responsibility and green energy adoption, the VA loan program will allow veterans to borrow additional funds when they wish to improve their property's energy efficiency. This can be taken as part of a refinance or purchase loan.
Veterans can take up to $6,000 to help pay for qualified improvements, including heat pumps, thermal windows, solar heating systems, etc. The program does not allow applicants to use this facility to buy window air conditioning fixtures, household appliances, and other temporary additions.
Who Qualifies for a VA Loan?
There are specific qualification requirements in place that will determine who is eligible for loans under the VA program. These are the requirements put in place by the Department of Veterans Affairs. Applicants must also have a COE (Certificate of Eligibility) and meet your particular lender's income and credit conditions.
Below are the minimum requirements put in place for VA eligibility. As an applicant, you must meet at least one condition on this list.
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You have at least 181 total days of active service outside of wartime.
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You were married to a service member who lost their life while serving or because of a disability they acquired during service.
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You have served a minimum of 90 consecutive days during wartime.
- You have a minimum of 6 years serving in the Reserves or National Guard.
If you do not meet any of the above, do not despair, as the type of discharge you received from your service might still qualify you. These discharge variations include:
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Being discharged due to a reduction in force, hardship, or at the government's convenience
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Being discharged for early-out after serving a minimum of 21 months out of a 2-year enlistment
- Being discharged for a service-connected disability or a medical condition
If you aren't quite sure about your VA loan eligibility status, then your best course of action will be to have a consultation with your preferred lender. Any reputable lender can go through your options with you and explain any minor points and details that the VA loan program entails.
What Requirements do Lenders Need Before Issuing VA Loans?
Even though the eligibility for VA loans is established along guidelines set by the VA, the final decision of whether or not to issue a loan will fall to the lender. Lenders will have additional eligibility requirements that they look at when making their decision, and these typically revolve around an applicant's income, existing debt levels, and credit history.
While the VA does not insist that loan applicants have a good credit score, most lenders will only approve a loan if their credit score exceeds 620.
In addition to their mortgage credit rating, lenders tend to check that applicants have an income that allows them to keep up with their payments and significant expenses while having enough money left over to keep up with their day-to-day payments (food, medication, transportation, etc.).
This leftover money is referred to as residual income. By ensuring that applicants have sufficient residual income, lenders play an essential role in keeping people safe from potential financial distress and have the funds to tackle emergencies.
Aside from residual income levels, lenders will also examine an applicant's (Debt-To-Income Ratio). A DTI measures a person's debt burden compared to their income. This figure will quickly let lenders know whether you're in a comfortable enough position to take on additional debt.
Things to do in Osceola County, Florida as a Veteran
Veterans and service people living in Osceola County, Florida, will be eligible for VA home loans. As such, it's a good idea to learn a little about what goes on in the county as you try to figure out whether it is the place for you.
This county is located in the center of Florida, within the Orlando-Kissimmee-Sanford Metropolitan Statistical Area. It has its county seat in Kissimmee and, according to 2020 census data, carries a population of 388,656 people. It is among the three counties in Florida with a Hispanic majority population, with 54 percent of the residents identifying with the group. It owes this figure to its sizable Puerto Rican-American population.
Here's a quick look at some attractions and things to do in Osceola County, Florida:
Take Up Fishing at Lake Tohopekaliga
Fishing is one of the most relaxing, enjoyable activities anyone can participate in, and Osceola County offers some of the best fishing to be had anywhere in Florida. Aside from the fishing going on, you will be situated in pristine settings with wildlife such as alligators and bald eagles. Lake Toho is a great scene offering excellent bass fishing opportunities.
You can take a private charter out onto the lake if you don't have a craft of your own. An experienced captain conducts each tour, and all the tools, reels, and safety equipment you might need will be provided. All you'll need to bring is your camera, sun hat, and camera.
The Osceola Center for the Arts
If you are interested in arts and culture, then the Osceola Center for the Arts will provide countless hours of enjoyment. This center is the focal point for all things creative in the county, including visual arts, performance art, theater, and gallery spaces.
Aside from these, the center allows you to sign up for art classes, acting classes, music instruction, or with the various performative theater groups based there.
Go Airboat Riding
The Wild Florida Airboats & Gator Park is one of Central Florida's most beloved attractions. It is the only airboat eco-tour facility within a wildlife park. It offers a significant change from the nearby Walt Disney World. It features plenty of things to do and enjoy, including sunset tours, thrilling daytime tours, and enchanting nighttime tours into the Florida Everglades.
You can take a walk out in the wildlife park, exploring the variety of creatures big and small that populate the park. Should you prefer something a little bit more exciting, you can hop onto a ranch buggy and take a fun-filled tour of the wider park setting, including the working cattle ranching operation that has been happening here since the early 1850s.
Indulge in Some Golfing
Nothing beats a solid round of golf when it comes to clearing your mind and refreshing your spirits. It makes for good exercise out in the open air as well. One of the finest golfing facilities in Florida can be found at ChampionsGolf Club.
This famous golf club features two excellent 18-hole courses designed by renowned course designer Greg Norman. The facility doubles up as a commercial/tourist destination spanning over 1500 acres of pristine real estate located southwest of Walt Disney World.
Whether you're a seasoned pro or a learner hoping to learn their way around a set of cubs, ChampionsGate will be a great place to golf. The facility hosts the David Leadbetter Golf Academy, an incredible place to learn the ropes of top-flight golfing from experienced golf pros.
There's plenty of family fun at ChampionGate's Omni area, which features fine dining restaurants, water slides, lazy rivers, swimming pools, service spas, fitness centers, basketball courts, tennis courts, and other high-end amenities. This golf destination hosts the 'Fathers and Sons' golf tournament, televised all over the United States every year.
Visit Lake Runnymede Conservation Area
In 2007, the Osceola County authorities bought the Runnymede Conservation Area as part of the Environmental Lands Conservation Program. The conservation area is a 43-acre preserve that runs along Lake Runnymede, with Lake Tohopekaliga to its right.
The property, which used to be grazing land, currently hosts a variety of wildlife, including sand-hill cranes, gopher tortoise, Sherman's fox squirrel, wading birds, and more species on endangered lists.
The wildlife here is also incredibly diverse, and visitors can experience everything by hiking on any one of the numerous trails that traverse the conservation area. The Lake Runnymede Conservation Area is kept open to the general public, offering plenty of activities, including camping (no more than six people), picnicking, wildlife viewing, hiking, and passive recreation.
Final Thoughts
Whoever you are, whatever you do, and wherever you're from, owning a home is a great aspiration. The VA loan program is most effective for helping American service veterans purchase their own homes.
If you qualify and hope to buy a home of your own in Osceola County or elsewhere in the United States, then the VA program is well worth looking into. Seek a reputable lender, and they will steer you in the right direction depending on your particular needs and desires.
(Jun 7, 2023)
