Veterans Day is an annual U.S. holiday for honoring our military veterans. The federal holiday is observed on Nov. 11 every year, and is also known as Armistice Day or Remembrance day throughout the world. The date is significant, as Nov. 11 is the anniversary of the signing of the Armistice that ended World War I.
As we observe Veteran’s Day today and honor our troops, let’s also take a look at a way we can help homeowners who served our country, by letting them know about VA loans.
A VA-guaranteed loan is a loan made by private lenders to eligible veterans. If a veteran wants to purchase a home, condominium or manufactured home, the VA (Department of Veteran Affairs) can guarantee up to $417,000 of the total loan — much higher than veterans can usually get with most conventional home loans.
If your veteran clients are considering refinancing an existing loan, VA offers two options: either refinance to reduce your client’s current interest rate or take equity out (cash-out). The “cash-out” option is limited to $144,000.
Additionally, some veterans do not need to worry about financing a down payment, as the portion of the home purchase price which the buyer pays in cash does not finance with a mortgage on a VA loan. However, there are certain funding fees that arise that area percentage of the total home loan that must be paid to the VA at closing. Closing costs also still apply.
According to Military.com, specifically, a VA home loan can help veterans:
- Buy a home or residential condominium
- Build a home
- Repair, alter or improve a home
- Refinance an existing home loan
- Buy a manufactured home with or without a lot
- Buy and improve a manufactured home lot
- Install a solar heating or cooling system or other weatherization improvements
- Purchase and improve a home simultaneously with energy efficient improvements
- Refinance an existing VA loan to reduce the interest rate
- Refinance a manufactured home loan to acquire a lot
There are other VA Home Loan Safeguards:
- The VA may suspend from the loan program those who take unfair advantage of veteran borrowers, or decline to sell a new home or make a loan to an eligible veteran of good credit because of race, color, religion, sex, disability, family status or national origin.
- The builder of a new home is required to give the purchasing veteran a one-year warranty that the home has been constructed to VA-approved plans and specifications. A similar warranty must be given for new manufactured homes.
- In cases of new construction completed under VA or HUD inspection, the VA may pay or otherwise compensate the veteran borrower for correction of structural defects seriously affecting livability if assistance is requested within four years of a home loan guaranty.
- The borrower obtaining a VA loan may only be charged the fees and other charges prescribed by VA as allowable.
- The borrower can prepay without penalty the entire loan or any part not less than the amount of one installment or $100.
- The VA encourages holders to extend forbearance if a borrower becomes temporarily unable to meet the terms of the loan.
For more information, visit Military.com, or ask you one of your local lenders for advice on what they can offer. Also, don’t forget to remember our troops today!