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VA Mortgage Loans

VA Home Loans can be used to refinance an existing mortgage with either the Interest Rate Reduction Refinance Loan (IRRRL) or a cash-out refinance. VA loans are specifically designed for military personnel, providing them exceptional value, especially for first-time buyers.

VA loans are guaranteed by the U.S. Department of Veteran Affairs to help active duty military and veterans qualify for homeownership. They provide lower interest rates and better terms than conventional loans and are exclusively for service members and certain military spouses.

Basic Allowance for Housing (BAH)

The Basic Allowance for Housing (BAH), is a military entitlement for active duty personnel calculated by location and pay grade. The allowance is designed to provide service members housing compensation equitable to local civilian housing markets. The BAH can be used toward rent or a mortgage, allowing military personnel to build equity in their property, even if they do not have a down payment.

Certificate of Eligibility (COE)

Borrowers can initiate the loan process without the COE, however, it is required to move the loan toward funding. Once the borrower has contacted a loan officer, they can obtain the COE on their behalf. Otherwise, the borrower can contact the Veterans Administration directly to obtain the certificate. The VA determines the eligibility and the Certificate of Eligibility (COE) verifies the length and type of service that qualifies the borrower for the housing benefit.

VA Benefits

  • No down payment required

  • Lower interest rates than conventional loans

  • No monthly mortgage insurance premiums

  • No prepayment penalty: Sell or refinance without having to pay a penalty

  • Reduced funding fees: Veterans receiving service-connected disability compensation qualify for reduced loan fees or exemption from funding fees

  • Ability to finance the VA funding fee: The funding fee can be included in the entire loan amount

  • Less than perfect credit usually accepted

  • 100% cash out refinance: Borrowers can use the property’s value and take cash out to pay off debt, make repairs to the home, remodel, etc.

VA Requirements

VA loan eligibility requires one of the following requirements:

  • 90 consecutive days of service during wartime

  • 181 days of active service during peacetime

  • 6 or more years of service in the National Guard or Reserves

  • Being the un-remarried, surviving spouse of a service member who died in the line of duty, or as a result of a service-related disability

VA Loan Options

Refinance

VA mortgage holders may refinance with a VA Interest Rate Reduction Refinance Loan (IRRRL) and the VA cash-out refinance to lower their interest rate.

For Veterans who currently have a VA Loan, the VA Refinance offers:

  • Simplified application process

  • Access to a lower interest rate and monthly mortgage payment

  • Bank statements, W2s, paychecks and other documents are not required

The VA Cash-Out refinance allows homeowners to take cash out of their home's equity, even if they are in another type of loan like a USDA or FHA.

Purchase

  • VA loans with a Fixed Rate are ideal for having a consistent payment for the life of the loan

  • An Adjustable Rate Mortgage is designed for borrowers looking for the advantage of the upfront savings offered in an ARM loan, especially if the individual expects to be relocated within the next five years.