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VA Loans in Sarasota County, Florida: Take Advantage of the Zero Down Payment

Is living in a Gulf Coast city on your bucket list? If yes, consider moving to Sarasota County in Florida. This area is best known for the infamous Ringling Museum of Art. But there are many more reasons to love this region, including fantastic weather and pristine beaches.

The best part is if you are a service member or veteran, the US Department of Veterans Affairs (VA) may help you buy a home in this area through various loan programs. What’s more, VA loans come with zero down payment, no PMI, and many other juicy offers.

Keep reading to discover more about VA loans, eligibility requirements, and what makes them worth your consideration. This article will also outline various outdoor activities that make Sarasota County a haven for eligible veterans and service members.


Fundamentals of VA Loans

You may use a VA loan to finance a home if you are an eligible veteran, active-duty service member, or surviving spouse. That means these loans are a type of mortgage for qualified applicants in the US.

Several things make VA loans different from other conventional mortgages. First, they are guaranteed by Veterans Affairs. This department’s primary role is to offer diverse benefits programs like home loans to veterans, survivors, and families.

If the VA guarantees VA loans, which entities provide them to applicants? Private lenders like mortgage companies and qualified banks. But, sometimes, the Veterans Affairs also acts as a mortgage lender. For that to happen, you need to apply for a VA direct home loan rather than a VA-backed home loan.

The other distinguishing aspect of VA loans is they don’t require borrowers to put down any money, i.e., ZERO DOWN PAYMENT! Couple that with no PMI (private mortgage insurance), and these mortgages become one of a kind.

You can use a VA loan to refinance a mortgage or buy, build, repair, or renovate a home.


Types of VA Loans

Earlier, we discussed the different lenders providing VA loans: the VA and private entities. That means, fundamentally, VA loans are categorized into direct and VA-backed loans.

As the name suggests, direct home loans come directly from the Veterans Affairs. So, working with the VA is a prerequisite if you apply for this type of loan. The department also manages your loan.

On the contrary, if you prefer interacting with private lenders, VA-backed home loans should be your go-to. Simply put, the VA encourages financial institutions to finance eligible applicants while guaranteeing the loans against default and total or partial losses.

Besides the direct home loan and VA-backed loan categories, the following VA mortgages are available today:


Home Purchase Loans

A VA home purchase loan is tailored for borrowers that need financial help to build, buy, or renovate their homes. Thus, if you are in a similar predicament, you may apply for a VA home purchase loan and use it to improve your life.

But, before applying for a VA purchase loan, ensure you satisfy the requirements stipulated by the US Department of Veterans Affairs. What does that mean? First, you must qualify for a VA home loan COE (certificate of eligibility). If you don’t know yet, a COE informs loan lenders that you meet all relevant eligibility requirements.

In addition, VA purchase loans are for borrowers that meet the department’s and private lenders’ income, credit, and various other requirements.

Most importantly, you can only apply for a home purchase loan if you plan to use it to buy a house that will become your primary residence, not a vacation, income-generating, or any other type of home.

You can use a home loan to buy your first home, a single-family house with four or fewer units, a manufactured home, or a condo in a project approved by the VA. If you want to improve a newly-purchased home or add new features, this solution may come in handy too.


Native American Direct Loans

If you or your spouse are Native American, the Native American Direct Loan program (NADL) can help you acquire a loan, provided you’re a veteran. You can use the loan to buy, construct, or renovate a house on federal trust land. It may also help you refinance an existing NADL loan and lower your interest rate.

Besides being for veterans with Native American roots or non-Native American vets with Native American spouses, NADL loans are for borrowers that meet specific requirements.

To get this mortgage, your tribal government should have an agreement or MOU (Memorandum of Understanding) with the Department of Veterans Affairs. The MOU or agreement should explain how the NADL program will work on its trust lands.

That isn’t all. Native American direct loans are also for applicants who meet the department’s credit standards and possess valid home loan COEs. Not to forget, you can’t get a NADL loan without proving that your income is sufficient to cover mortgage payments and other homeownership costs.

Most importantly, you can only use a Native American Direct Home Loan to purchase property that you’ll live in.


Cash-Out Refinance Loans

Any borrower that wants to replace their current loan with a different solution under different terms should apply for a cash-out refinance loan. In other words, if you want to cash out using your home equity or refinance a non-VA loan into a VA-guaranteed mortgage, this option should serve your right.

Of course, cash-out refinance solutions are for eligible participants. By that, we mean borrowers who qualify for VA-guaranteed home loan COEs and meet the department’s and private lenders’ requirements (income, credit, etc.)


Interest Rate Reduction Refinance Loans

An interest rate reduction refinance loan (IRRRL) may be the right solution for any eligible participant wishing to reduce their monthly payments or increase their stability. The same applies to parties that need to refinance their debts at lower interest rates, convert adjustable-rate mortgages (ARMs) into fixed-rate mortgages, or cut their loan term.

Since the IRRRL program’s process is relatively quick and easy, some people call it the VA Streamline Refinance Program. So, don’t get confused when someone mentions the latter instead of the former.

Are you ready to get an interest rate reduction refinance loan? If yes, don’t apply yet. You need to know if you are eligible first.

IRRRL loans are for applicants with existing VA-guaranteed loans and proof they currently reside in a house the mortgage covers or did so at some point. Finally, your chances of getting this VA loan are slim to none if you don’t plan to use your IRRRL loan to refinance an active loan.


Reasons to Apply for a VA Loan

If you are still debating getting a VA loan, here are several reasons to do it as soon as possible:


Zero Down Payment

If you haven’t been able to purchase a home because you can’t afford to put money down, here’s some good news: VA home loans don’t require a down payment. So, you can use these solutions to get desirable dwellings without spending years saving enough to cover a down payment.

What if you want to put money down on your house and pay your loan faster? Well, the VA has no qualms with that. You can make a down payment and enjoy many benefits, including a lower funding fee, reduced monthly payments, and higher equity.


Reasonable Interest Rates

Generally, VA loans attract lower interest rates than conventional mortgage solutions. For instance, you may have to pay interests as low as 4.875% for a 30-year fixed VA home purchase loan. That is considerably lower than the average for most 30-year fixed mortgages - 5.83%.

And what do lower interest rates come with? More spending money in your pockets!


Flexible Credit Requirements

The VA doesn’t have a set minimum credit score for borrowers. However, most lenders require applicants to score 620 or higher.

Some lenders may agree to give you a VA loan if your credit score is below 620, but the offer may come with certain conditions. For instance, an institution may require you to pay a higher interest rate.


No PMI

Some lenders require borrowers to pay PMI (private mortgage insurance), which protects the financial institution from defaults. Typically, PMI costs around 0.5% to 1% of your loan. So, if you purchase a home worth $600,000, you may pay $3,000-$6,000.

Luckily, unlike conventional mortgages, VA loans don’t have PMI requirements. However, if you apply for a direct or VA-backed loan, expect to pay a funding fee, typically equal to 1.65% of the loan amount.


Happy baby having fun with his military dad at new home


How to Apply for a VA Loan

Follow these steps to apply for a VA loan and purchase the home of your dreams:

  • Find a VA-approved lender
  • Get a Certificate of Eligibility
  • Pre-qualify for a loan
  • Shop for a home
  • Put in an offer
  • Wait for VA underwriting and appraisal
  • Close on the loan and move in

Who’s Eligible for VA Loans in Sarasota County, Florida?

The following determine if you are qualified for a VA home loan in Sarasota County:


Certificate of Eligibility

You can’t get a VA loan without a COE because lenders use this certificate to ascertain your eligibility for financing.

A typical COE should carry vital details like your VA home loan entitlement and funding fee statuses. Although some lenders help you apply for a Certificate of Eligibility, others expect you to tackle the process yourself.

Furthermore, there are several documents you must submit while applying for a COE. These include a copy of discharge papers (for veterans) and a statement of service (for active-duty service members).

The statement of service should indicate your full name, social security number, the date you were enrolled to serve, etc. It must also bear your personnel officer or commander’s signature.


Property Requirements

To qualify for Department of Veterans Affairs financing, a home must meet a couple of Minimum Property Requirements (MPRs). First, it must have functional heating, cooling, and electric systems.

The property’s roofing should also be adequate and in a condition that suggests it’ll persevere through the foreseeable future. A clean and reliable water supply and sanitary facilities are also a prerequisite.

A VA loan also helps you buy a house if it doesn’t show signs of lead-based paints or wood destroying dry rot, fungus, and insects.

Lastly, any home you plan to purchase with a VA loan needs access to safe sewage disposal, all-weather private or public streets, and sufficiently ventilated crawl spaces and attics.


Service Guidelines

The VA has a series of minimum active-duty service requirements. If you are a service member, you must have served 90 continuous days or more to qualify. And you should prove that you served for that period all at once, with zero breaks in service.

But the rules are different for veterans. Strictly speaking, VA veteran requirements depend on the time of service. For instance, you may be eligible for a VA loan if you served for 24 continuous months or more between the Gulf War period and the present day. Check out VA’s minimum requirements page for more.

What if you were discharged from service? In that case, you may qualify for a VA home loan if your discharge arose from an accepted reason. That may be a hardship, the government’s convenience, early out, force reduction, service-connected disabilities, and specific medical issues.

Unfortunately, you can’t get a VA loan if you have a dishonorable discharge.


Is Using a VA Loan to Buy Property in Sarasota County, Florida Advisable?

Buying a home in Sarasota County is a splendid idea if you are a veteran. Why? The area offers you ample opportunity to enjoy the following outdoor activities:


Fish

Fishing is good for everyone, including veterans. This activity helps you keep fit, socialize with other enthusiasts, unplug, and bolster your self-esteem. These are fantastic benefits you can enjoy after buying property in Sarasota County.

Sarasota has several of the best fishing spots in Florida, the Ringling Bridge, Ken Thompson, South Lido Beach Park, and Bird Key, to mention a few. You’ll likely catch different fish in these areas, including tarpon, snook, and jack.


Hike

According to experts, hiking can help veterans find peace and healing. Plus, this outdoor activity is a good workout that you can use to manage or avoid many health issues, including high blood pressure, heart diseases, and high cholesterol.

The good news is that if you are an avid hiker or plan to become one, Sarasota County’s trails won’t disappoint. When you move to this area, check out hiking spots like the Nathan Benderson Park Loop, Rothenbach Hammock Loop Trail, and Siesta Key Beach.


Play Golf

If you wonder whether golf benefits veterans, the answer is a resounding yes. The reason is that this sport lets players enjoy boundless serenity, tranquillity, and peace. These are vital for veterans that want to get back on course.

Various golf courses are located in and around Sarasota County, Florida. The best ones include Tatum Ridge Golf Links, University Park Country Club, and Sara Bay Country Club.


Parasail

Do you love gulping in fresh sea air now and then? If yes, try parasailing. This activity is highly relaxing, and the fresh air is a god-send for anyone living with bronchitis, asthma, sinus pressure, and other respiratory complications.

If parasailing sounds like an activity you may grow to love, moving to Sarasota should prove indispensable. That is so because this region has a couple of local parasailing resources like Siesta Key Watersports, Adventure Parasail, and Englewood Parasailing.


Sail

Sailing has countless physical and mental health benefits. Physical-wise, this adventurous activity helps you develop muscle strength and boost cardiovascular health. And you can use sailing to improve concentration, peace of mind, and spatial awareness.

Lucky for you, Sarasota County isn’t short on sailing. This area has various institutions you can use to sail, such as Freedom Boat Club and Key Sailing. And if you are a newbie, learning the ropes from experts like Sara-Bay Sailing School & Charter will do you wonders.


Get Started Today

Now that you are acquainted with VA loans and the reasons to use them to buy a home in Sarasota County, taking that final leap should be easy. But before applying, check if you meet all eligibility requirements. There is no need to spend valuable time and energy on an endeavor doomed to fail.

With over 50 years of mortgage industry experience, we are here to help you achieve the American dream of owning a home. We strive to provide the best education before, during, and after you buy a home. Our advice is based on experience with Phil Ganz and Team closing over One billion dollars and helping countless families.

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