What is a VA Loan? Learn the Essentials.
According to a recent U.S. Department of Labor news release, “The jobless rate for all Veterans was little changed at 3.5 percent in 2018.” Thankfully, it seems as though many Veterans may be in the perfect position to obtain a home loan based on this broad financial picture. This possibility is strengthened by the fact that Veterans have earned some resources that others do not have available to them.
One such resource is a VA Loan, which is a loan backed by the U.S. Department of Veteran Affairs (VA). In this post, we will explain the essentials of the VA Loan. VA loans can be a true financial difference maker for Veterans. Read on to find out if a VA Loan might be right for you and how Local Mortgage Inc. could help you secure one in Colorado.
History of VA Loans
VA Loans were developed as U.S. soldiers returned home from the Second World War. The goal of these loans was to allow Veterans to purchase homes without requiring any money for down payments. The U.S. Government intended to help returning Veterans adjust back to civilian life as smoothly and happily as possible.
Over the years, the VA has expanded the pool of individuals that qualify for the loans they back. That said, the basic goals of these loans remain the same as they were in the 1940s. The VA backs loans for Veterans so that they can secure housing for themselves and their families at a competitive interest rate, even if they do not quite have the typical financial resources necessary. This helps give Veterans the ability to obtain beneficial home loans and set themselves up for future success.
VA Loan Structure
Contrary to what you might think, the VA does not actually supply the loans themselves. Instead, the VA backs loans financed by private lenders, guaranteeing the loan amount to the lenders. In this way, VA Loans and loans that use private mortgage insurance (PMI) share similar structures, although VA Loans tend to offer a greater advantage than loans backed with PMI.
The financial backing Veterans receive from the Department of Veteran Affairs goes a long way toward helping them secure a home. This backing eases the standards required to qualify for home loans to a level where those who qualify for a VA Loan no longer need a down payment to secure a home. While VA Loans do require good credit and a stable monthly income, the backing from the VA puts Veterans out ahead.
VA Loans do have upper limits, but those upper limits largely depend on the housing market in the geographic area where the Veteran wants to reside. Additionally, they are no longer just for Veterans; current Service Members as well as some spouses of military members can also secure loans backed by the Department of Veteran Affairs. VA Loans might be one of the best ways to secure a home loan with a competitive interest rate at little upfront cost to the homebuyer.
Let Us Help You Secure a VA Loan
Over the last decade, private lenders have had to increase the standards they use to determine how they loan out money. This affected the housing market in particular. As a result, VA Loans can now give Veterans a major advantage in the market and do even more to help Veterans get ahead.
The recent changes in the housing market have also made it much more important to work with experts in home loans and mortgages. If you qualify for a VA Loan, then the experienced team at Local Mortgage Inc. will help you work through the process of securing a VA Loan. We are also available to assist real estate agents in securing loans for their clients. Give us a call to see how we can help you.