Everything You Need to Know About VA Mortgage Lenders

The VA mortgage also called the Veterans Administration mortgage, offers competitive rates and terms to qualified members of the armed forces who have served on active duty at least 90 days after September 10, 2001, or have been honorably discharged from military service during the same time period. If you’re looking to buy your first home or refinance an existing mortgage, learning everything you need to know about VA mortgage lenders will help you make an informed decision that fits your individual needs and situation. Read on to learn more about who can take advantage of this valuable benefit and how it can benefit you and your family going forward.



What is a VA mortgage lender?

A VA mortgage lender is a bank or lender that provides home loans for veterans and active military personnel. The Department of Veterans Affairs guarantees that certain lenders will be paid in full, even if the borrower defaults on their payments. In order for an individual to qualify for a VA loan, they must have served during wartime (post 9/11) or received a Purple Heart. There are other stipulations as well, but this is the basic requirement. First-time home buyers can also receive up to $36,000 from the VA. They do not need to pay back any money as long as they remain a qualified first-time buyer for two years after purchasing the house. 

The government does not require mortgage insurance with these types of loans which makes them more affordable than traditional mortgages because you only pay interest each month rather than both principal and interest over 30 years.

How do VA mortgage lenders work?

There are three types of mortgage lenders: commercial, residential, and government. Government mortgage lenders, like the Department of Veterans Affairs (VA) as well as the Federal Housing Administration (FHA), offer a type of program that is designed specifically for those who have served in the military. Typically you will need a Certificate of Eligibility from your lender confirming that you have served during wartime or peacetime. The FHA has different rules depending on how much time you’ve been out of active duty service. For example, if you’ve been out less than one year then you will be able to get financing up to 97% with a minimum down payment requirement of 3%. 

A veteran may also be able to purchase property with an installment contract, which offers up financing for long-term projects that can span over thirty years. If this does not work for you then it is important to know about VA loans which require no down payment and give 100% financing as long as your home meets certain qualifications such as being located in an area that qualifies under the low-income housing guidelines.

What are the benefits of using a VA mortgage lender?

The first benefit of using a VA mortgage lender is that you can use your VA benefits to purchase a home. This includes the full amount of your monthly mortgage payment and the money for any down payment and closing costs. In order to qualify for this, you must have been honorably discharged from the military or be in active duty service with a disability rating by the Department of Veterans Affairs (VA) of 50 percent or more. The second benefit is that there are no down payment requirements. For most mortgages, a 20 percent down payment is required, but with a VA mortgage lender, it's not needed at all. Thirdly, there is no private mortgage insurance (PMI) requirements when purchasing with an FHA-backed loan with the Veterans Administration backing it up.

How to find the best VA mortgage lender for you

When you are considering a VA mortgage, it is important to find the best lender for your situation. This is because not every lender provides the same rates and services. Depending on your credit score, employment history, and other factors, you may need a different type of loan. In this post, I will outline some things you should look for when choosing a VA mortgage lender. For starters, make sure they offer the specific type of loan that suits your needs. If you have perfect credit and make more than $200k a year, consider getting a VA jumbo or adjustable-rate mortgage with low-interest rates. If you don’t qualify for any loans through the VA program or just want something conventional, see if they offer FHA or Conventional loans. 

Another thing to watch out for is how much money they require upfront from borrowers with less-than-perfect credit scores (below 620). Many lenders require at least 10% down from these borrowers, but there are others who offer zero percent down programs where you can get approved even with little to no money down!

FAQs about VA mortgage lenders

1) Who is eligible for a VA mortgage? 

People who have served in the U.S. military and meet other qualifications may be eligible for a VA mortgage.

2) What are the eligibility requirements? 

You must have a discharge other than dishonorable, served at least 90 days of continuous active duty, and received an honorable discharge. Additionally, you must not have been convicted by court-martial or under the civil law of certain crimes or have had money judgments rendered against you or unpaid fines assessed against you that total more than $2,500 since leaving the service that remain unpaid at the time of application. There are also income limits and down payment requirements: The gross annual income limit is $37,000 if single, $55,000 if married with one income, or $67,500 if married with two incomes. You can also qualify for 100% financing if your monthly housing costs will not exceed 25% of your monthly gross income when combined with your spouse's income. The down payment is generally 10%.