Veterans’ Guide to Home Loans and Mortgages

A VA home loan is made available by the US Department of Veterans Affairs (VA). The VA helps eligible service members, Veterans, and surviving spouses get mortgages.

This type of financing allows veterans and active-duty military personnel to buy a home without a down payment, private mortgage insurance, or even excellent credit.

Banks and mortgage companies provide VA home loans, using the VA as a guarantee to offer better conditions.

VA loans have a few unique characteristics and strict qualifying requirements. As a result, you must grasp the VA home loan qualification procedure and what you’ll need at closing. This way, you may avoid unnecessary delays and get the keys to your new home quickly.

Basic Principles of VA Loans

Let’s look at three basic principles of VA loans to understand how they work and how you can avail of them with ease:

1. Loan Program Essentials. This loan program is the most powerful mortgage option on the market for many veterans and military members. VA loans provide no down payment, no mortgage insurance, more flexible restrictions, and other significant advantages.
2. Fixed and Adjustable Rates. Homebuyers can also pick between a fixed-rate mortgage and an adjustable-rate mortgage (ARM). Unsurprisingly, a fixed-rate mortgage locks in your interest rate for the whole term. Your interest rate won’t fluctuate with the economy. That means your monthly mortgage payment’s principal and interest will stay constant. An adjustable-rate loan’s interest rate can change at any time throughout the loan’s duration. There are various types of ARMs, each with unique dangers and advantages. An ARM usually starts cheaper than a fixed-rate loan. A lower interest rate brings more money into your pocket, which may help you get a bigger loan. An ARM’s interest rate may change due to several external economic variables. If interest rates stay constant or fall, you may be able to control your adjustable rate. It isn’t easy to choose between fixed and adjustable-rate mortgages. They pick an ARM for the upfront savings and expect to refinance once the loan is eligible for annual modifications. Others may not plan to stay in the property for long and want to take advantage of lower loan rates. However, refinancing or selling your home isn’t always easy or cheap. It’s difficult to foretell the future. Before choosing a rate, make sure to calculate the statistics with your lender’s support.
3. Mortgage Terms. This is how long you must pay before the debt is paid off. The term length also affects monthly payments for the principal and interest. Although there are other options, 30- and 15-year mortgages are the most common. 15-year loans frequently offer cheaper interest rates than 30-year loans. A shorter loan term means less interest over the life of the loan. The speedier timeline means more significant monthly payments. Moreover, determine how long you want to live in the home, your mortgage payment budget, and other factors. Also, many home loans now have no prepayment penalties, allowing you to pay off the loan early without financial consequences. Even if you have a 30-year mortgage, monthly or annual principal payments may help you build equity and pay down debt faster.

Start Your VA Home Loan with Ease at MidAmerica Bancorp

The VA mortgage is now more critical than ever. After the Great Recession, many Veteran and military buyers struggled to get mortgages, and many lenders tightened their criteria again in preparation for the 2020 global pandemic.

With stricter credit and down payment criteria, VA loans are a lifeline for Veterans and active Military personnel.

If you’re ready to start your VA loan, want to check your eligibility, or have questions about the VA loan, call a Veterans United Home Loans representative right away or consult with a refinancing expert today.

Get a personalized VA home loan assessment from MidAmerica Bancorp, Inc. We offer a range of first-time homeowners loans and returning home buyer loans with low down payment options. So, if you’re looking to purchase a house or leap towards home refinance in Chicago and throughout Illinois, Indiana, Florida, Michigan and Wisconsin, we are the ones to call. Call us today at (708) 237-4050.