(Jun 7, 2023)
This post will cover everything you need to know about VA loans in Union County, Florida. So whether you're a first-time home buyer or looking to upgrade to a larger home, read on to learn more about VA loans and how they can help you achieve your homeownership goals.
What Is the VA Loan Program?
VA loans are particular home loans available to eligible service members, veterans, and their spouses. They are provided by the Department of Veterans Affairs (VA) and backed by the federal government. The VA loan program was created in 1944 to help veterans returning from World War II purchase homes. Since then, the program has guaranteed over 25 million loans.
VA loans are available through private lenders, such as banks and mortgage companies. The VA guarantees a portion of the loan, which protects the lender against losses if the borrower defaults. This makes it easier for borrowers to qualify for a VA loan than a conventional mortgage.
VA loans can be used to purchase a home, build a home, or make improvements to an existing home. Borrowers can also use VA loans to refinance an existing home loan.
Are you a Hometown Hero? Find out your eligibility for the Hometown Heroes Loan Program in Union County, Florida.
Eligibility Requirements
Before taking advantage of the VA loan program, you must know if you meet the eligibility requirements. First and foremost, you must have served at least 90 days of active duty during wartime or 181 consecutive days during peacetime. If you're a reservist or national guard member, you must have completed at least six years of service. You can also be eligible if you are the spouse of a service member who has died in the line of duty or due to a service-related injury.
You must also have a satisfactory credit history and enough income to cover your monthly mortgage payments. In addition, you'll need to obtain a Certificate of Eligibility from the VA. This document proves that you meet the basic service requirements for the loan program.
Are There Loan Limits?
Yes, there are. The Department of Veterans Affairs (VA) loan limit is the maximum amount of money a qualified veteran can borrow to pay for a home. The limit is set by the VA and is based on the median home prices in each county. In general, the limit for most counties is currently 647,200. However, in high-priced counties, the limit is almost $971,000.
For veterans looking to buy a home, it's essential to know their county's VA loan limit to budget accordingly. The limits are updated every year and typically increase with inflation. This year, the limits increased by almost $99,000 from last year.
The VA Funding Fee
The Department of Veterans Affairs (VA) charges a one-time funding fee to help cover the costs of the VA Loan Guaranty Program. The VA Funding Fee is a percentage of the loan amount and is paid to the Department of Veterans Affairs to help sustain the program. The exact amount varies depending on factors such as the type of loan, down payment, disability status, and whether it's the Veteran's first or subsequent VA loan.
The VA funding fee generally ranges from 1.25 percent to 3.3 percent of the loan amount. For example, if you're borrowing $600,000, your funding fee would be between $7,500 and $19,800.
The good news is that the VA funding fee can be financed into your loan, so you don't have to pay it out of pocket. And if you're a veteran with a service-related disability, you may be exempt from paying the fee. So if you're considering applying for a VA home loan, don't let the funding fee scare you off.
Types of VA Loans
There are four common types of VA home loans: Purchase Loans, Interest Rate Reduction Refinance Loans (IRRRLs), Cash-Out Refinance Loans, and Native American Direct Loans.
VA Purchase loans are for first-time homebuyers or veterans who want to buy another home after selling their previous house. IRRRLs can be used to lower your monthly payments or shorten your loan term. They can also be used to convert an adjustable-rate mortgage to a fixed-rate mortgage. To qualify for an IRRRL, you must already have a VA Loan and live in the house that will serve as collateral for the new loan.
Cash-out refinance loans allow veterans to refinance their existing loans and take cash out of the value of their homes. Native American Direct Loans are available to eligible Native American Veterans who wish to purchase, construct, or improve a home on Federal Trust Land.
The Benefits of Taking a VA Loan
VA Loans offer many benefits that other loan programs don't. Here are just a few of the advantages:
Zero Down Payment
For many home buyers in Union County, Florida, the biggest obstacle to homeownership is the down payment. With a traditional mortgage, borrowers must put down at least 20 percent of the purchase price.
However, eligible borrowers can finance 100 percent of the purchase price with no down payment required with a VA loan. This means that even if you don't have thousands of dollars saved for a down payment, you could still qualify for a VA loan.
But even if you have some money saved, you can use it to cover other costs associated with buying a home, such as closing costs or appliances.
No Private Mortgage Insurance (PMI)
PMI is insurance that protects the lender if you default on your loan. PMI is typically required for conventional loans if you make a down payment of less than 20 percent. This can add hundreds of dollars to your monthly payments and thousands of dollars to the total cost of your loan.
However, you can avoid this added expense with a VA loan. This can help you save money every month and over the life of your loan.
In addition to saving money each month, not having to pay PMI can also help borrowers to qualify for a larger loan. For example, on a $250,000 loan with a 3 percent down payment and a monthly PMI of $167, the borrower's monthly payment would be $1,083.
If the borrower did not have to pay PMI, their monthly payment would be reduced to $916, allowing them to qualify for a higher loan amount.
Low-Interest Rates
Rates are a significant factor when deciding what kind of mortgage to get. They can also be a make-or-break factor in whether or not you can afford your dream home. So, it's no surprise that VA loans' top benefits are their low-interest rates.
On average, VA loan rates are about 0.5 percent to 1 percent lower than conventional loan rates. That may not seem like much, but over the life of a 30-year mortgage, it can save you thousands of dollars in interest payments. And in today's market, every little bit helps.
No Pre-payment Penalties
If you've ever taken out a traditional mortgage, you know that there are often strict penalties for paying it off early. However, with a VA loan, you can pay off your mortgage anytime without penalties.
If you unexpectedly come into some money or if interest rates drop sharply, you can simply pay off your mortgage and enjoy the peace of mind that comes with being debt-free.
This freedom gives you much more flexibility in managing your finances and can help you save a significant amount of money over the life of the loan.
More Flexible Credit Requirements
VA loans are known for being more accessible to borrowers with less-than-perfect credit. That's good news for first-time home buyers and others who may not have the strongest credit history. So, a VA loan could still be an option if your credit score isn't where you'd like it to be.
Of course, your credit score will still play a role in the loan process, even with a VA loan. The higher your credit score, the better your chances of getting approved for a VA loan and a lower interest rate. But even if your credit isn't perfect, you may still be able to qualify for a VA loan.
In general, VA loans have more flexible credit requirements than conventional loans. So, a VA loan could still be an option if you've been turned down for a conventional mortgage.
VA Loans Are Assumable
An assumable mortgage is a loan that can be transferred from the seller to the buyer. This can be a great benefit if you're selling your home in a buyers' market or if interest rates have increased since you first took out your mortgage.
The buyer can assume your mortgage with a VA loan if they meet the VA's eligibility requirements. That means they'll take over your mortgage payments and be responsible for the loan.
This can be an excellent benefit for both buyers and sellers. For buyers, it can help them get into a home with a lower interest rate than they could get on their own. And for sellers, it can make their homes more attractive to buyers.
Are VA Loans Reusable?
You've taken the plunge and bought your first home. You're probably wondering if you can use your VA loan benefits again. The short answer is yes, you can! You can use your VA loan benefits as many times as you want. However, a few things to remember if you plan to take out multiple VA loans.
Entitlement is the amount of money the VA is willing to guarantee on your loan. First, you'll need to sell your existing home before you can take out another VA loan. Second, you'll need to make sure that you have enough entitlement left to cover the new loan.
Finally, you'll need to find a lender willing to work with you on a second VA loan. Luckily, there are plenty of lenders out there that specialize in VA loans.
Steps When Applying for a VA Loan
Now that you know a little more about VA loans, you're probably wondering how to apply for one. The VA loan process is pretty simple. Just follow these steps, and you'll be on your way to homeownership in no time.
Step 1 - Get Your Certificate of Eligibility (COE)
Your COE is a document that proves to lenders that you're eligible for a VA loan. The easiest way to get your COE is to apply online through the VA's eBenefits portal. You'll need to log in with your VA account and fill out a short form. Once you submit the form, the VA will send you your COE within a few days.
Step 2 - Find a Lender
Once you have your COE, you'll need to find a lender specializing in VA loans. You can use the VA's Lender Locator tool to find a list of VA-approved lenders in your area.
Step 3 - Get Pre-approved
The next step is to get pre-approved for a VA loan. Pre-approval means a lender has reviewed your financial information and decided how much money they will lend you. Getting pre-approved for a VA loan is a good idea because it will let you know how much home you can afford. It will also give you a leg up when you're ready to make an offer on a home.
Step 4 - Find a Home
Now it's time to start shopping for your new home! You can use the VA's Home Loan Program to find VA-approved homes in your area.
Step 5 - Make an Offer
Once you've found the perfect home, it's time to make an offer. Be sure to let the seller know that you're paying with a VA loan so they can provide the necessary paperwork to your lender.
Step 6 - Get a VA appraisal
The VA will need to appraise your new home to make sure it's worth the price you're paying. The VA appraiser will look at things like the condition of the home and its location.
Step 7 - Close on Your VA Loan
Congratulations, you're almost a homeowner! Now you need to close on your loan. This is the process of signing all the paperwork and transferring the money to the seller. Your VA-approved lender will handle most of the details for you.
How to Enjoy in Union County, Florida
There's plenty to do for homeowners in Union County, Florida. Here are just some of them.
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Hiking - Union County is home to some of the best trails in Florida, including the Florida Trail and the Withlacoochee State Trail. Whether you're looking for an easy or challenging hike, you'll find it in Union County.
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Canoeing and Kayaking - Union County is home to several rivers, including the Withlacoochee and Rainbow rivers. These rivers are perfect for a relaxing day of canoeing or kayaking.
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Camping - Enjoy a weekend of camping at one of Union County's many campgrounds. You can pitch a tent at the Withlacoochee State Forest or park your RV at the Ocala National forest.
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Fishing - Union County is home to many lakes, including Lake Kerr and Lake Griffin. These lakes are perfect for a day of fishing. You can fish for bass, trout, and other types of fish in Union County.
- Golfing - Golf lovers, get ready for some of the best golfing in Florida. Union County is home to many golf courses, including the Lake County National Golf Club and the Silver Springs Shores Golf Club.
Apply Today and Enjoy Living in Union County, Florida!
Union County remains one of Florida's best places to purchase a home. Its gorgeous scenery and many outdoor activities make it easy to see why. Homeowners have a lot to enjoy, from hiking and camping to fishing and golfing.
Even better, aspiring homeowners have access to VA loans, making purchasing a home more affordable. So if you're eligible, don't hesitate to take advantage of VA loans in Union County, Florida.
Are you interested in a place to call home in Union County, Florida? Get in touch with us today and learn how we can help.
(Jun 7, 2023)
