(Mar 25, 2023)
What is a VA Loan?
A VA loan is an interest-free loan from the U.S. Department of Veterans Affairs (VA). It has been available since the 1930s and was intended to help veterans re-enter civilian life after serving in World War II, Korea, and Vietnam.
Through this program, the government provides funding to qualified borrowers who meet specific requirements to pay off their mortgages over time with no interest due until all principal has been paid off. At this point, the remaining balance will be forgiven by the government, and no taxes would be owed on that forgiven amount at that time.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Pinellas County, Florida.
The Zero Down Payment of the VA Home Loan
The zero down payment VA home loan is an excellent option for those who don't have much money to invest in their first home. With an interest rate significantly lower than what you'll find on most conventional mortgages, this type of loan can be an excellent way to get into the housing market without paying any upfront.
It's an excellent way for people who have bad credit or don't have enough cash on hand to pay for their down payment. Many lenders will allow you to qualify for a mortgage even if you don't have enough savings to cover the entire cost of your new home.
What Types of VA Loans Are Available?
Many VA loans are available depending on where you are in the process of becoming a homeowner. To get one, you only need to have a credit report (COE) and provide it to your approved lender.
The cost of a VA loan varies depending on whether you have a down payment and the amount of that down payment. One factor affecting your financing cost is how frequently you've previously accessed your COE. The financing charge may be waived for some borrowers, such as those who are disabled or have received the Purple Heart.
We have provided you with a list of the different types of VA loans.
VA Purchase Loan
A VA jumbo loan or a VA purchase loan is a type of mortgage that enables homebuyers to put $0 cash down on the property. If you get one, you'll be able to get a better mortgage than you would with a traditional home loan from a private lender.
However, remember that each lender has different terms, and not all lenders provide this type of VA loan.
A VA IRRRL (Interest Rate Reduction Refinancing Loan)
The Veterans Administration offers a more straightforward way to refinance your VA debt using the Home Equity Refinancing Loan. The IRRRL loan might be suitable if you want a reduced interest rate or monthly payment. Furthermore, you can effectively refinance your VA loan without paying any upfront money if you qualify for a financing fee waiver.
In addition, if you can show that the property was your principal residence for an extended period, you may be eligible for IRRRL benefits even though you no longer live there.
This is especially helpful for active-duty military households relocated to a different duty station but still own their home and want to take advantage of cheaper interest rates.
VA Cash-Out Refinance
You may want to consider cash-out refinancing if you have equity in your house and need quick cash. A VA cash-out refinancing can be a way to remove all of the equity you have accumulated or to restructure a loan that has a higher interest rate.
If you have previously used your Certificate of Eligibility (COE), you may or may not be able to use it on a cash-out refinance. You could only withdraw money from a VA loan refinancing up to the amount you've previously paid down.
Nevertheless, if you have a traditional mortgage or other loans on your property and wish to perform a VA cash-out refinance, you should be able to utilize your COE fully.
VA Renovation Loan
The VA will grant veterans an extra 15% credit on their home loan or refinancing, which can be used to finance energy-saving upgrades.
Veterans can finance up to an additional $6,000 in costs for eligible modifications like thermal windows or storm, solar heating, heat pumps, and cooling systems. The purchase of appliances, window air conditioners, and other movable modifications is permitted by this option.
How to Receive the VA Loan
Veterans can receive a VA loan in three ways:
Direct Loan
This is the standard VA home loan method. This means you must go through a lender that works with the VA, such as a bank or credit union, and submit an application directly to them. No third party is involved in this process, so you don't need to worry about waiting for paperwork or making payments until after you close your house.
Guaranteed Loan
This might be right for you if you have bad credit or low income but want to buy a new home. This option requires that you work with a lender that works with the VA and apply online directly with that lender. You'll also need to verify your income before they can issue you a guaranteed loan amount and complete your application process.
Self-Directed Loan
This type of loan allows veterans who already own their home or are planning on buying one soon to apply for an interest.
Limitations of VA Loan
The Veterans Affairs (VA) Home Loan Program is designed to help veterans buy homes without money or PMI. There are some limitations, however, including:
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You must be a U.S. citizen or national or have been honorably discharged from active military service within 180 days of applying for the loan.
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You must be 17 years old to receive credit approval for this program.
- Your credit score must be at least 720 to qualify for a zero percent down payment VA mortgage loan, or you will need an FHA-insured or conforming loan with less than 20 percent down payment.
The VA Loan Process
The VA loan process can be confusing, especially if you're new to it. You'll have to fill out an application and submit it with your income and credit information so the lender can determine whether or not you're eligible for a loan. If you're approved, you'll be notified by the lender that they will work with you on getting your paperwork ready and scheduled for closing.
Once everything has been scheduled, there are two more steps before the closing date:
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Your lender will send the title company documents needed for closing the transaction. This includes all your title reports (which include everything from surveys to titles), proof of insurance, and other documents needed to close your home purchase.
- After all of these documents have been sent and received by both parties involved — including the title company — a closing date can be set. The closing agent will notify those who are attending that this is happening soon, and everyone should come prepared with their paperwork at that time.
How Many Times Can We Use a VA Loan?
Yes! It's possible to take out multiple VA loans to purchase multiple properties with one lender and one application process — but only if those loans were previously approved by either the Department of Veterans Affairs (VA) or a veteran-owned bank.
You can also borrow as much money as you need at any time, so long as it isn't more than 100% of the value of your house. You can apply for a VA loan for each property individually and receive a separate loan amount if you have multiple properties.
The limit does not apply if one property is being purchased for another purpose (e.g., refinancing an existing mortgage), but there is no limit on how many times you can use a single VA loan for different purposes such as home improvements; renovations, or both!
The VA Funding Fee
The VA Funding Fee is a fee the applicant charges for using the VA Guaranteed Loan Program. The funding fee can range from 0% to 1%, and depending on your credit score, you may be eligible for 0% funding. The VA will collect no funding fee if you are eligible for 0%.
The VA Funding Fee is calculated as a percentage of the loan amount and is paid when closing the loan. The funding fee varies based on your credit score and whether you are approved to use a zero funding option or not.
To get started with a VA guaranteed loan, you must apply online at www.va.gov/apply/. Once complete, you will receive an approval letter within 24 hours that lists all your requirements, including financial information and proof of employment history or active military service (if applicable).
Overall Benefits of a VA Loan
Here are the key benefits of zero-down VA mortgage loans:
No Payment Until Closing
If you're refinancing an existing mortgage and need additional cash from your current lender, then a VA loan without a down payment could be a good option. You won't have to pay anything upfront with a VA home loan with no down payment. Your lender will charge interest on the balance of your loan until it's paid off at closing.
No Closing Costs
If you're refinancing an existing mortgage and need additional cash from your current lender, then a VA loan without a down payment could also be an option. There's no fee or cost associated with closing either! You'll have to pay interest until everything is paid off at closing.
No mortgage insurance
No private mortgage insurance (PMI) or mortgage insurance premium (MIP). PMI and MIP payments must be made monthly until the home is paid off. With a zero-down VA loan, there is no need for this expense because you'll get your first monthly payment when you close on your new house!
No appraisal required
Appraisals may be necessary with traditional mortgages, but they aren't required with VA loans! So if you want to buy in Pinellas County with as little money as possible, an FHA or USDA loan may not work because they require appraisals before closing. But with zero down VA financing, there's no need for an appraisal.
No prepayment penalty fees
If you want to sell your home before the term ends, you will have to pay a penalty fee – but only if you sell within the first five years of taking out the loan. After that period, there is no prepayment penalty fee!
Things to Do in Florida for Veterans
If you're a veteran, there are a lot of places in Florida you can visit and take advantage of. Whether you're a veteran with PTSD or not, visiting the beaches or other attractions will help you relax and forget about your troubles.
There are many things to do in Florida that veterans can enjoy, including:
Beaches
Florida is known for its beautiful beaches, so if your favorite thing is walking on the sand in the sun, this is the place for you. There are plenty of beaches to choose from, including the famous Atlantic Ocean Beach near St. Augustine and Clearwater Beach near Tampa Bay.
These are just two of the most popular beaches on the Sunshine State's Atlantic coast and some of the largest and most crowded ones!
Visiting Museums and Monuments
If you love history, then Florida may be just what you need! Many visitors make it a point to visit museums and monuments when visiting Florida. The best ones include:
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The USS Florida Memorial at Key West Naval Station (complete with submarine)
- The Museum of Art at UF (with an impressive collection of contemporary art)
Visit the Kennedy Space Center Visitor Complex
The Kennedy Space Center Visitor Complex is located in Cape Canaveral, Florida. This facility offers a variety of activities, exhibits, and displays that relate directly to the space program and other aspects of American history.
Some of these include an IMAX theater dedicated to the Apollo 8 mission and a visitor center with exhibits on NASA's Mercury program and other space-related topics. The visitor complex also includes an exhibit hall with several galleries with information about different aspects of the space program, including rockets, satellites, and astronauts.
Visit Disney World Resort
Disneyland - The Happiest Place On Earth offers several Disney events for Veterans Day, including an "Honor Flight" where veterans can take a flight from their home airport to Disneyland and have their photo taken with Mickey Mouse before making their way around the park.
There is also an opportunity for Disney employees to attend a special ceremony honoring veterans at the Anaheim Convention Center on November 12th from 8:30 a.m.-4 p.m.
The Florida Veterans Memorial
The Veterans Park in St. Cloud is a place to explore and relax. It's located on the banks of Lake Minnehaha. The park is an open-air museum with exhibits and artifacts from World War I and II.
The park is also home to a statue of General William Tecumseh Sherman, who led Union troops on the "March to the Sea" in 1864 during the Civil War.
The park has been around since 1928, but it was renovated in 2010 to make it more accessible for visitors with disabilities.
Fishing
Florida is a great place to retire with its warm weather, beautiful beaches, and plentiful wildlife. Florida offers many options if you're looking for ways to spend time with nature while still enjoying all the amenities of modern life.
Plenty of Florida lakes offer excellent fishing for bass, tarpon, and other species if you love fishing. If you prefer to hunt for your dinner instead of catching it yourself, there are many hunting clubs around the state where you can go on safaris with professional guides who know all about the good places to hunt deer or turkey.
Conclusion
The VA loan or the Veterans Affairs mortgage loan program offers those who served and their surviving spouses the opportunity to say thank you. It is a program backed by the U.S. Department of Veterans Affairs which assists in providing low-interest mortgage loans insured by the Federal Housing Administration (FHA) to eligible homebuyers whose service was at least 90 days. It provides several benefits and options to select between veterans and spouses.
(Mar 25, 2023)
