What is a VA loan?
VA loans are a $0 down mortgage option that is available to veterans, service members and selected military spouses. Private lenders such as banks or mortgage companies can issue VA loans and are guaranteed by the U.S. Department of Veterans Affairs.
In 1944, the United States government created the VA home loan to assist returning service personnel in purchasing homes. It does not require a down payment nor excellent credit. This program is a landmark that has provided more than 25,000,000 VA loans to Veterans, active-duty military personnel, and their families, helping them purchase or refinance homes.
The VA mortgage is now more important than ever. Many Veterans and military buyers experienced difficulty getting home financing after the Great Recession. Lenders tightened their lending guidelines due to the 2020 global pandemic.
VA loans have been a lifeline to Veterans and military homebuyers with higher credit scores and lower down payments in the past decade.
Although VA loans are a special loan product, they are not more complicated or burdensome than other types. This VA loan guide will help you navigate your VA home purchase, refinance, and maximize your hard-earned benefits.
Benefits of a Texas VA home loan include:
• No Down Payment Required
• Lower interest rate.
• Easier to qualify for with less stringent credit score requirements- from 500 Credit score
• Closing costs are often lower than other financing types. We charge no underwriting or processing fees.
• No private mortgage insurance requirement.
• Right to prepay loan without penalties
• Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.
VA Loan vs. Traditional Mortgages
Veterans and military homebuyers can access one of the most powerful and unique loan programs ever made. Compare the VA Loan to a traditional mortgage on your home.
At The Richard Woodward Mortgage Team, we shop over 160 lenders to find you the best rate. We love credit scores in the 800’s but even if you have a score as low as 500, we have VA home loan options available for you.
|VA Loans||Conventional Loans|
(for qualified borrower)VA loans are one of the few 0% down home loans that are still available today.
|Require at least 3% down payment
Conventional loans typically require down payments of at least 3% in order to secure a loan for a home. That is for first-time buyers only. This makes them prohibitively expensive for many homebuyers.
Banks do not require that you purchase Private Mortgage Insurance because VA loans are guaranteed by the government.
|PMI required private
Mortgage Insurance is usually required by borrowers who finance more that 80% of their home’s worth. This adds on monthly costs.
|Competitive Interest Rates
According to Ellie Mae data, VA loans have the lowest average fixed rate on the market for over five years. We shop over 160 Lender that are competing for your business, we will get you the best rate.
|Low Rates at a Price
Buyers need to have top credit scores to be eligible for the best conventional mortgage rates. VA loans allow Veterans to access low rates with a credit score as low as 500.
|It is easier to qualify
VA loan is a job benefit that veterans and serviceman have earned. It allows them to afford homeownership. The program features flexible credit underwriting guidelines that are more forgiving and accommodating.
|Standard Qualification Procedures
Conventional mortgage options can have higher credit scores and lower down payments than VA loans. In some cases, there may be stricter underwriting guidelines.
Different types of VA Loans
VA Loan Benefit offers Veterans powerful options for home financing.
VA Purchase Loan
The VA loan can be used by veterans and military personnel to buy new or existing houses with $0 down payments. VA purchase loans allow Veterans to purchase single-family homes or condominiums. They can also buy manufactured homes, multi-unit properties, and new construction.
Lender policies and guidelines may vary. These types of VA purchase loans may not be available from all lenders.
The VA Interest Reduction Refinance loan (IRRLL), one of two VA loan programs, is the most popular choice for Veteran homeowners that are looking to refinance.
These loans are also called VA Streamlines. They’re low-cost, simple refinance loans, which in some cases may not require income verification, credit underwriting or an appraisal.
Only Veterans with a VA loan can use the VA IRRRL. The new rate must be lower than the old rate. There is a time limit for recouping the cost and fees. These factors ensure Veterans receive the maximum financial benefit.
VA Cash-Out Refinance – Is not available in Texas.
The VA cash-out refinance permits qualified homeowners to refinance a mortgage and withdraw money from their equity. This loan is available to Veterans with or without VA loans. Homeowners who meet the criteria can usually refinance up 90 percent of their home’s worth.
Lending guidelines and loan to-value requirements may vary from one lender to the next. These loans are available to homeowners who do not need cash. Veterans with non-VA mortgages may use this option for a basic rate and term refinance.
VA Energy Efficient Mortgage
Veterans can borrow money from the VA to make energy efficiency improvements in their homes. This is part of a home purchase, or refinance.
Veteran can get up to $6,000 more to finance qualified improvements like heat pumps, solar heating and cooling, storm or thermal windows, and heat pumps. This option is not available to homeowners who want to buy appliances, window air conditioner units or other non-permanent items.
Explore the VA Loan
VA loans have helped many veterans, military families and service personnel achieve their dream of homeownership. This benefit has a promise at its core: Veterans can access a home loan program that is flexible and offers significant financial benefits. These include the possibility to buy a property with no down payment.
Let’s look closer at VA loans and how to get started.
What is the VA guarantee?
The VA loan is a federal program. However, the government does not usually make direct loans for Veterans. Private lenders, such as Veterans United Home Loans, finance the loan, while the Department of Veterans Affairs provides a guarantee.
This guarantee protects the lender from total loss if the buyer defaults. Private lenders are encouraged to offer VA loans with better terms than other mortgage options.
What are the VA loan limits?
Veterans who are qualified and have full VA loan entitlements can borrow as much money as the lender will allow, without any down payment. Buyers with less than full entitlement to VA loans are not eligible for the VA loan limits. This is because they either have more active VA loans, or they have lost an existing one due to foreclosure. You can find out how VA loan limits could affect you by calling (214) 945-1066.
What is the VA funding fee
The VA Funding Fee is paid directly to the VA. This ensures that the program continues to be available for future generations of Veterans and military homebuyers. It also removes any burdens on taxpayers and Veterans.
The fees vary depending on the circumstances of each borrower. The funding fee for a VA home loan is usually 2.3 percent of the property’s purchase price. The fee for subsequent VA loan benefits is 3.6 percent. No matter how many times you have used the benefit, the interest rate reduction refinance loan fee is only 0.5 percent.
VA borrowers have the option to add the funding fee to their total loan amount. The VA allows Veterans to reduce closing costs and allows sellers the option of covering all or part of these expenses. While many of our borrowers buy a home without any money due at closing. Every buyer’s situation is unique.
Some Veterans and their surviving spouses are exempted from the funding fee by the VA. Veterans who receive compensation for service-connected disabilities are the most likely to be exempt. Eligible spouses of veterans with VA loans are also exempt. The VA is the only one who can determine whether funding fees are exempt.
Is the VA loan a good choice?
The most powerful loan option available is the VA loan. These loans offer a number of huge benefits including no down payment, no mortgage insurance and flexible credit guidelines. They also have the lowest industry average fixed interest rates.
Each Veteran buyer’s situation will be different. A home loan specialist can help you understand all your options and make the right financial decisions.
How can I obtain a VA loan?
Talk to a trusted lender who is familiar with VA loans and how you can get the best from this valuable benefit. Getting preapproved is the first step in most cases. This can be done quickly using your smartphone, tablet, or laptop.
Before you make an offer on your dream house, it is important to get preapproval for a loan. This preapproval letter will give you an idea of your buying power, and show sellers and agents that you are ready to close.
Can I get a VA loan again if I have used it before?
This is not a one-time offer. The VA loan benefit is yours for life once you have earned it. The VA loan can be re-used multiple times. You can even have more than one active VA loan.
If you are looking for a Plano Texas VA home loan you have come to the right place. We lend all over Texas and several other states. Do you want special rates reserved for our country’s heroes? As the nations largest mortgage broker we provide our veterans with exceptional service and competitive rates because we cut out the big overhead and marketing budgets and deliver the best possible rate from our 160+ lenders. Nexa Mortgage is proud to serve our veterans and active-duty families of the United States Armed Forces in Plano Texas and provide excellent rates with our Plano Texas VA Home Loan Programs.
Beware of lenders that try to imply that they are affiliated with the Department of Veterans Affairs. The VA does NOT make home loans, only approved lenders do. Not all approved lenders are the same. Even those that say they specialize in VA home loans may take longer to close than The Richard Woodward Mortgage Team of Nexa Mortgage. We love and support our veterans. For your best Plano Texas VA Home Loan, we have you covered.
For your free VA home loan pre-qualification, call us now at (214) 945-1066 or Apply Now.
EASY STEPS FOR A VA LOAN
- Complete an online application now or call (214) 945-1066
- Provided your income and asset documents as well as your DD214 to your secure portal
- Review your Loan options and receive your Certified Home Buyer Approval
- Shop for a home. If you don’t have a Realtor, we will connect you with one.
- Make your offer
- Provide your executed home purchase contract to your loan officer
- Sign your initial loan disclosures
- Get a property inspection and a Wood Destroying Insect report and provide it to your loan officer
- Pay for your appraisal
- Shop for and obtain your homeowners’ insurance
- Provide any additional documentation the underwriter may ask for.
- Sign your closing disclosures
- Go to closing and sign the official loan documents
- Move into your home