Serving our country is one of the most honorable duties, which is why we are dedicated to helping veterans, servicemen, and their families become and remain homeowners. As a VA approved broker in Colorado Springs, we are experts in VA home loans, and we’ve outlined some of the most common questions that we hear at The Reichert Mortgage Team. These FAQs will help you discover just what a VA loan is and how it can benefit you and your family.
1. What Is a VA Loan?
In 1944 the Servicemen’s Readjustment Act more commonly referred to as the GI Bill of Rights was signed into law by President Franklin D. Roosevelt. The GI Bill provides veterans and their families with federally guaranteed housing while requiring no down payment. Following the signing of this bill veterans and their families were granted access to homeownership after serving their country. By obtaining a VA loan you will be guaranteed a maximum of 25 percent of a home loan amount up to $113,275, which limits the maximum loan amount to $453,100. However, being a veteran does not guarantee you to qualify for a home loan, you will still need to meet the service requirements and credit/income requirements to be eligible.
2. What Can I Get with a VA Loan?
The VA works with approved lenders to help service members and their families buy, build, repair, retain, or adapt a home. The loan applies to the primarily occupied home, manufactured home, lot for a manufactured home, or approved condo project. After qualifying with an approved lender or broker you will be able to purchase the home of your dreams.
3. Who is Eligible for a VA Loan?
Eligibility is determined by title and service commitment. Here’s the conditions to qualify for a VA loan:
- Active duty service members and veterans are eligible if they completed at least 181 days of active duty service in peacetime or 90 days in peacetime.
- Service members with 6 years of service in Reserves or the National Guard are eligible for a VA loan.
- Spouses of service members who died in the line of duty are eligible for VA loans.
To prove this service, VA loans require a Certificate of Eligibility (COE), obtained through the VA benefits portal, or through a VA approved lender in Colorado Springs. The lender will take in all of your information and help you find a loan that is suited for your needs or wants, allowing you to buy a home, repair your current home, and much more.
4. What are the Benefits of a VA Loan?
The main benefit of a VA loan is that it allows service members to purchase a home with up to 100 percent financing and no money down. Similarly, VA loans can include beneficial terms like no required mortgage insurance. In essence, these loans allow service members to buy the home they need, without a heavy financial burden. The VA loans can include the following depending on the service member’s needs:
- Guaranteed Loans
- Refinancing Loans
- Specially Adapted Housing Grants
5. How Many VA Loans Are Available to Me?
A VA loan can be applied for as many times as you like. The only rule is that the loan must only be used for the current primary residence—so multiple properties can’t be purchased with a VA loan. Unfortunately as wonderful as it would be the VA loan will not be able to help you with purchasing a vacation home.
6. What is the Maximum Amount from a VA Loan?
There is no maximum VA loan—it is only limited by the value and the purchase price, so every need should be covered. However, the Colorado Springs area is generally set at a limit of $417,000.
7. Can I Pay off the Loan Early?
Yes, you can. There is no prepayment penalty on VA loans, so the loan can be paid off as early as you can. Alternatively to a conventional loan VA loans do not penalize you for early payoff. The objective of the GI Bill was to provided homeownership to veterans, therefore a penalty for paying your home off early seems counterintuitive.
8. What About My Credit Score/Bankruptcy?
Generally, the better your credit score the better your rates and ability to qualify. However, it depends on the Colorado Springs Mortgage lender. Similarly, the average wait-time after declaring bankruptcy is two years, but it is up to the lender. Although the GI Bill’s objective was to provided housing for all veterans it is still important that lenders do there do diligence. Similarly to if you were to apply for a conventional loan you would be required to share your credit score and bank history. Qualifying for this federally funded loan is important. If you are in the position of a bad credit score or previous bankruptcy you may need to wait a few years.
9. Are Children of A Living or Deceased Veteran Eligible for The Home Loan Benefit?
Unfortunately, the children of an eligible veteran will not be eligible to obtain a VA loan.
10. Why Is A VA Loan Better Than Other Loans?
If you qualify for a VA loan you will be able to enjoy the following benefits
- no required down payment
- competitive interest rates
- no mortgage insurance requirements
The VA has no funding fee, which assists with the costs of the program. Additionally, you can take advantage of many options for refinancing, or lowering your interest rate. In this case, you would receive cash from the equity you’ve built in your home.
How do I Apply for a VA Loan in Colorado Springs?
The first step in obtaining a VA Loan in Colorado Springs is finding a broker who has been approved, and who is experienced in this type of loan. The broker will be able to help you find what loans you are eligible for and the best process to get one.
The Reichert Mortgage Team is one of Colorado Springs’ top VA brokers. We are veteran owned and operated, and found programs like Pikes Peak Heroes to help our service members get the best opportunity for home ownership as possible. Contact us today to set up a free consultation about VA home loans!