What is a VA loan?
A VA loan, short for the U.S. Department of Veterans Affairs loan, is a mortgage option exclusively available to those who’ve served our country in the armed forces.
These loans are guaranteed by the VA, which means they come with several perks and benefits that can make buying a home more accessible and affordable.
VA loans are designed to help Veterans and Active-Duty Service Members become homeowners without the need for a hefty down payment or private mortgage insurance (PMI).
Who can qualify for a VA mortgage loan?
To qualify for a VA mortgage loan, you must have served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard after September 15, 1940, and were discharged under conditions other than dishonorable. Let’s break down the requirements for eligibility:
-
Are spouses of Veterans eligible?
Some spouses of Veterans may be eligible for a VA loan. A few examples are:
- Unmarried surviving spouse of a Veteran, who died as a result of service or service-connected causes
- Surviving spouses of a Veteran who dies on active duty or from service-connected causes who remarries on or after age 57 and on or after December 16, 2003
- There are additional instances of either one-time use or full eligibility for surviving spouses, we can help you determine if this applies to you.
-
What is Certificate of Eligibility (COE)?
To apply for a VA loan, (except a VA IRRRL), you’ll need a Certificate of Eligibility from the VA. You can obtain this by submitting VA Form 26-1880 online or CrossCountry Mortgage can obtain it for you. This document also determines the current entitlement amount.
-
Service-connected disability
If you have a service-connected disability related to your Military service, you may be exempt from the VA funding fee, which is a one-time fee typically required for VA loans.
VA loan benefits
VA loans come with a host of benefits for eligible Veterans and Active-Duty Service Members.
- Flexibility of zero down payment (in most cases if full VA entitlement is available) and the absence of private mortgage insurance (PMI)
- Competitive interest rates
- Lenient credit score requirements, however, CCM does require a minimum credit score for VA Jumbo loans with a loan amount greater than or equal to $1.5M
- Service Members with service-connected disabilities have the VA funding fee waived
- VA offers financial counseling and assistance to help borrowers avoid foreclosure and stay on track with their mortgage payments
VA home loan types
Now that you have a basic understanding of what a VA loan is and how it works, let’s explore the different types of VA loans available.
-
VA purchase loans
VA purchase loans are designed to help you buy a primary residence. With full VA entitlement, there is no down payment requirement, and with competitive mortgage interest rates, these loans make homeownership a reality for many who might not have thought it possible.
-
VA cash-out refinance loans
If you already own a home and have some equity built up, a VA cash-out refinance allows you to tap into that equity to pay off debt, make home improvements, or cover other expenses. It’s an excellent way to leverage your home’s value to improve your financial situation.
-
VA IRRRL (VA streamline refinance)
The VA Interest Rate Reduction Refinance Loan (IRRRL), also known as the VA streamline refinance, is a fantastic option for lowering your monthly mortgage payments.
This type of loan is designed to refinance your existing VA loan into a new one with a lower interest rate. These mortgages often come with minimal paperwork and reduced costs.
How to get a VA loan
Getting a VA loan involves several straightforward steps:
