Frequently Asked Questions (FAQ) on VA Loans

1. What is a VA loan?

A VA loan is a mortgage loan that is backed by the U.S. Department of Veterans Affairs (VA). It is designed to help eligible veterans, active-duty service members, and certain members of the National Guard and Reserves become homeowners. VA loans offer several benefits, including no down payment, lower interest rates, and no private mortgage insurance (PMI) requirement.

2. Who is eligible for a VA loan?

To qualify for a VA loan, you must meet certain eligibility requirements based on your military service. Eligibility criteria typically include:

• Veterans who served 90 days of active-duty service during wartime or 181 days during peacetime.
• Active-duty service members who have served for at least 90 consecutive days.
• National Guard and Reserves members who have served for at least six years or were called to active duty.
• Spouses of veterans who died in service or as a result of a service-related disability. 

3. Do I need a down payment for a VA loan?

No, one of the major advantages of a VA loan is that it allows eligible buyers to purchase a home with no down payment. This can significantly reduce the upfront costs of purchasing a home.

4. What is the VA funding fee, and do I have to pay it?

The VA funding fee is a one-time fee that helps reduce the cost of the VA loan to taxpayers. The fee typically ranges from 1.4% to 3.6% of the loan amount, depending on factors like your military service and whether it is your first time using a VA loan. Some veterans with disabilities may be exempt from the funding fee.

Check out VA.gov to learn more about VA funding fee

5. Are there any limits on how much I can borrow with a VA loan?

No, limits were removed in 2020. As long as you qualify you can utilize a VA Jumbo Loan.

Check out VA.gov to learn more about loan limits.

6. Can I use a VA loan more than once?

Yes, you can use a VA loan multiple times, as long as you meet the eligibility requirements each time. If you’ve previously used your VA loan entitlement but have repaid the loan in full and sold the property, your entitlement may be restored, allowing you to use it again.

7. What are the credit score requirements for a VA loan?

The VA does not set a minimum credit score requirement for VA loans, but most lenders prefer a score of at least 620. VA loans are more forgiving than conventional loans, so if your credit score is below the typical requirements for other loan types, a VA loan may be a good option.

8. What are the advantages of a VA loan compared to a conventional loan?

• No down payment: VA loans don’t require a down payment, unlike most conventional loans.
• Lower interest rates: VA loans often come with lower interest rates than conventional loans.
• No PMI (Private Mortgage Insurance): Unlike conventional loans, you are not required to pay PMI, which can save you hundreds of dollars a month.
• Easier qualification: VA loans tend to have more flexible qualification standards, including relaxed credit score requirements. 

9. Can I use a VA loan to buy any type of property?

VA loans can be used to purchase a variety of properties, including:

• Single-family homes
• Condos (must be VA-approved)
• Multi-family homes (up to four units)
• Manufactured homes (under specific conditions) 

However, the property must be your primary residence. VA loans cannot be used for vacation homes or investment properties.

10. What is the process for applying for a VA loan?

The process for applying for a VA loan is similar to that of other mortgage types, but there are a few additional steps:

1. 1. Check eligibility: Ensure you meet the military service requirements for a VA loan.
   2. Obtain a Certificate of Eligibility (COE): This document confirms your eligibility for a VA loan. You can obtain it through the VA or your lender.
   3. Find a VA-approved lender: Work with a lender who is familiar with the VA loan process.
   4. Submit documentation: Provide necessary documents such as proof of service, income, credit, and assets.
   5. Underwriting and approval: The lender will evaluate your application and issue an approval or denial.
   6. Close the loan: Once approved, you’ll proceed to closing, where you’ll sign the loan documents and receive the keys to your new home.
    

11. What should I do if I’ve already used a VA loan and want to buy again?

If you’ve previously used a VA loan and still have remaining entitlement, or if you’ve paid off your previous VA loan and sold the property, you can use your VA loan benefit again. If your entitlement has been used up, you may still be able to buy with a second-tier entitlement for a higher loan amount, but you may need to make a down payment.

12. Can I refinance a VA loan?

Yes, you can refinance your existing VA loan using a VA Interest Rate Reduction Refinance Loan (IRRRL). This option allows you to refinance to a lower interest rate without requiring a new appraisal, and it typically has simpler qualifications. If you want to refinance into a cash-out loan, you can use a VA Cash-Out Refinance.

 
If you have additional questions or want more detailed assistance, feel free to contact me! I’m here to help navigate the VA loan process every step of the way.