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How Do VA Home Loans Work?

by Heather Rutherford

How Do VA Home Loans Work?
Eligibility

According to the United States Department of Veteran Affairs, VA home loans are available for nearly every veteran who has ever served in any branch of the United States military. VA benefits are also available for certain government workers such as Public Health Service officers, military academy cadets and National Oceanic & Atmospheric Administration officers among others. Unmarried spouses of military members who died in service are eligible as well. However, eligibility is not that cut and dry. To get a VA home loan you must serve at least 181 days before getting a loan. If serving during WWII, the Korean War or the Vietnam War, you must have only served for 90 days. If discharged from the military, your separation must be under honorable terms. If discharged under anything other than honorable, eligibility may still be possible under the VA's guidance. A local Veteran Affairs office will further aid in determining your eligibility. Eligibility is also dependent on standard home loan requirements such as debt-to-income ratio and credit score.

Getting a Loan

A VA home loan is one of the easiest loans to acquire. Since a VA home loan requires no down payment and boasts some of the lowest interest rates available, vets are able to afford homes with less than perfect credit scores. VA home loans are awarded through traditional mortgage providers (banks, credit unions and mortgage companies). These loans are then guaranteed by the government for repayment. While there is a cap as to how much each person is able to use with his VA home loan, dependent upon time in service and rank, many people use their VA benefits to pay for several houses. When looking to acquire a VA home loan, simply fill out an application for a home loan through a reputable mortgage provider. Be sure to make your veteran status known early on. After a credit check is run, you will be provided with a pre-approval letter. This letter informs potential home sellers that, when you make an offer on a home, you can afford to purchase the home. After you place an offer on a house and it is accepted, you will be required to close on the house. This involves filling out more paperwork. After this process is completed, you have attained a VA home loan and are the new owner of a home.
Picking a Home

While attaining a VA home loan is considerably easy for those with decent credit, picking out your new home is often more difficult. Before the government will issue you a home loan, a home inspection must occur on any home you plan to buy. During this inspection, if anything about the home is found to be unsuitable for living, you will be unable to purchase that home with a VA loan. This can include anything from roof repairs to foundation problems, electrical issues to septic tank troubles. However, many owners are willing to make some repairs to a residence in an attempt to sell. These options can be discussed with your Realtor.