Are you a veteran or surviving spouse of a veteran? Are you thinking about buying a home but wondering how much money your mortgage will cover? Do you have questions about VA loans, how they work, or whether you’re eligible? As a VA-approved lender, we’ve put together a list of the most important questions about VA loans you should consider when thinking about buying a home using the VA home loan benefit.
Does the VA lend me the money for my mortgage?
The U.S. Department of Veteran’s Affairs (VA) doesn’t lend money to veterans directly. Instead, they approve select lenders, like River City Mortgage, and guarantee your mortgage with that lender, making it easier for service members like you to buy a home.
Can I buy a home outside the U.S.?
You can use your VA loan to buy a home in American possessions and territories, which includes Puerto Rico, American Samoa, Virgin Islands, Guam, and the Northern Mariana Islands.
What is the VA funding fee?
This is a mandatory upfront, one-time fee based on your loan amount, service history, etc. The funding fee generally ranges from 0.50% to 3.60% of your total loan amount.
It is most commonly between 2.15% to 2.4%, and can sometimes be waived if you have a service-related disability.
Can I finance the VA funding fee?
Yes. You can include the VA funding fee in your total mortgage amount, allowing you to reduce or eliminate any out-of-pocket expenses at closing.
Can the seller pay my closing costs?
Yes, the home seller is allowed to pay your closing costs. You must negotiate this ahead of time.
Can I use a VA loan to buy a rental property?
The VA requires that you live in any property you buy. That means you can only use your VA loan to purchase a primary residence. You can’t use a VA loan to purchase a rental or vacation property.
Do I have to prove I’m eligible?
A certificate of eligibility (CoE) confirms your loan eligibility to a VA-approved lender. Apply for your COE online or ask your lender to help you get one.
Can I use the VA loan program more than once?
Yes, provided you’ve successfully paid off previous VA loans or another veteran assumed it, and you either still have loan entitlement or a new loan entitlement.
Do I have to pay mortgage insurance?
No. You do not have to pay private mortgage insurance (PMI) or mortgage insurance premiums (MIP) on VA loans.
How much of a down payment do I need to make?
None. VA loans do not require a down payment of any size regardless of the amount of the loan. However, a down payment can make your loan more affordable.
Is there a credit score minimum?
No, you do not need a minimum credit score to be eligible for a VA loan. However, some VA-backed lenders have minimum requirements of 620, while others work with credit scores below 620.
Is there a limit to how much I can borrow through a VA loan?
No, there are no amount limits with a VA loan. VA-eligible homebuyers can get any size loan without a down payment. However, you may still need to meet additional lender eligibility conditions.
Are VA loans and FHA loans the same?
Both programs offer home loans that the U.S. government guarantees. The U.S. Department of Veterans Affairs is responsible for backing VA loans, which have their own unique benefits. FHA loans are similar to VA loans but are handled through the Federal Housing Administration.
What are the VA service requirements?
The VA expects applicants to meet at least one of the following service requirements:
- 90 consecutive wartime days
- 181 peacetime days
- At least six years with National Guard or Reserves
Are widows or widowers eligible for VA loans?
Certain surviving spouses of veterans can meet the VA eligibility requirements for VA loans.
I filed for bankruptcy more than two years ago. Does that disqualify me from receiving a VA loan?
No, and more than two years ago, lenders might disregard it entirely.
I’m single and on active duty outside the U.S. Can I have my parents or another family member buy a house for me back home?
No. The VA requires the homebuyer or spouse to physically occupy the house at the time of purchase.
If a homeowner dies before the VA loan is paid off, who’s responsible to pay it?
A surviving spouse or loan co-borrower is required to continue making payments. Without a co-borrower, the VA loan’s outstanding balance becomes the responsibility of the veteran’s estate.
What U.S. Military branches are eligible for VA loans?
All U.S. Armed forces, including Army, Navy, Air Force, Marines, and Coast Guard, plus National and Reserve Guards are eligible.
Do I have to get a termite report?
Yes, if your home is in a “moderate to heavy” termite infestation area, as determined by the Termite Infestation Probability Zones Map.
Get the answers you need for your VA loan questions
If you’re ready to move forward, you can start the application process in minutes. But if you have more questions about VA loans, reach out to the regional VA loan specialists at River City Mortgage. We want to sit down with you in person or virtually and help you find an affordable home loan.