Benefits Military Veterans Should Take Advantage Of Being a military veteran is not only something to be proud of but also an honor that comes with many benefits. When we think of veteran’s benefits, the first thing that typically comes to mind is the GI Bill, which helps veterans receive an education or training. However, there are other benefits available to veterans that are equally important. Are you thinking of getting a mortgage but unsure what’s available or what the best option might be for you? If so, you should be aware of some of the benefits available to military veterans like yourself. Learn more below. VA Loan One of the most important benefits available to military veterans looking to become a homeowner is the VA loan. This mortgage loan is available to vets and their spouses. Although you’ll get your financing through a bank or lending institution, it is the Department of Veterans Affairs that backs or guarantees the loan. What this means is that, if you fail to make the payments, the government guarantees the bank will get their money back. Benefits of the VA Loan In addition to providing veterans and their families with the opportunity and means to purchase a home, the VA loan has many benefits of its own that make it unique from conventional loans. • No down payment – Unless the purchase price of the home is more than the appraised value, or the lender specifically requires it, you will not need a down payment. • Lower interest rates – As the buyer, you will be able to negotiate the interest rates with the bank. • Reduced funding fees – If you put down at least a five percent down payment, your funding fees will be lower and can be financed with the loan. • Lower closing costs – If not lower, loan closing costs will be comparable to other mortgage loan types. • No mortgage insurance required. • Loans are assumable. • Loans can be prepaid without penalties. • Financial assistant to veterans having difficulty making payments due to temporary financial difficulties. Loan Limits When veterans apply for this type of loan, they’re given a basic entitlement of approximately $36,000. Typically, lenders will allow vets to borrow up to four times that amount or $144,000. However, veterans who need additional money can apply for additional entitlements.
Currently, veterans can get a guaranteed loan of up to $424,100 without needing a down payment. This is typically much higher than they would be eligible for with a conventional mortgage loan. Steps for Getting the Loan Knowing the steps or processes required to get the loan is the first step towards becoming a homeowner. • Find a home you wish to buy and negotiate the purchase price with the seller. • Read and sign a purchase contract, which is contingent on the approval of the Veterans Affairs. • Choose a lender and complete a loan application. • Give the lender a Certificate of Eligibility. The lender may be able to retrieve this certificate for you through the automated certificate of eligibility (ACE) system. • The lender collects income information and retrieves your credit information. • Lender orders appraisal of the property. • Lender will inform you of loan approval or denial. • You must attend the loan closing and sign the mortgage, note and any related documentation. • The loan is sent to the Department of Veterans Affairs for guaranty. • You will receive the certificate of eligibility with the amount of entitlement annotated on it.