VA Construction Loans
Serving for the United States of America is an honor that millions of people have claimed. From the veterans of past wars and military actions to today’s armed forces specialists, the millions of people that have served their nation during times of war or piece deserve respect for their efforts. In both a public way and a range of different opportunities, they most certainly end up receiving it.
With both tradition and importance on its side, the United States Military is a force that’s at the base of the country’s position around the world. A force outnumbering all but one of the world’s military groups, it’s a large organization that’s been responsible for many of the greatest developments of the past few decades. It’s also an organization that supports its own at home though several measures.
Among these are scholarships to leading universities and technical colleges in the country, many of which are paid for entirely by the military following a full term of service, and special programs to improve the lives of veterans throughout the country. These include social programs to assist those that have served in a time or war, and special social grants for people that have served previously.
Another benefit for ex-military veterans, and one that’s less well known, is the large amount of loan programs that they qualify for. From business loans to specialist grants, if you’ve served in either an Army, Navy, Air Force, or Marines organization before, you may qualify for a range of personal and development-based loans, many of which have low interest rates and added key benefits.
In this guide, we’ll be looking at one of the most popular loans for veterans, VA Construction Loans. These loans, like other loans aimed at veterans of the United States Military, require no deposit and are available to assist with purchasing or constructing a home. A measure implemented to improve the lives of veterans following their service, they’ve grown into an immensely popular service.
Unlike most home loans, including the standard fixed rate and adjustable rate mortgages most of us use to finance our homes – VA construction loans require no down payment from a borrower. In the majority of conventional cases, this would transfer a great deal of risk onto the lender, as the risk of default is significantly higher. However, this is minimized by a guarantee from the government.
In fact, the government guarantees a great deal of a VA construction loan, often to the point where an individual with little or no long-term credit history is able to take out a loan to fund their home’s construction with no down payment at all. Because of this, VA loans are seen as an excellent choice for those with access to them, as they have few of the downsides of a standard home loan.
While not all of your loan is guaranteed, the presence of a government guarantee makes it more likely that you’ll be able to secure a competitively positioned interest rate. This means that you’ll pay less over the long term to finance and service your loan, often to the point where your savings on the loan extend into the tens of thousands of dollars in total.
This is generally true regardless of the type of loan – either a fixed rate home loan or a construction loan that’s at a variable – known as ‘floating’ – interest rate. There are, however, cases in which your loan may not be guaranteed. This is generally reserved for homes or planned homes that exceed the realistic cost of completion, or are priced significantly beyond your own financial means.
There are several requirements on the borrower side in order to qualify for a VA construction loan, however. The first is that the house needs to be regularly inspected by a VA agent in order to assess the construction quality and overall safety of the house. This is as much to protect homeowners as it is to protect lenders, and the vast majority of checks are to ensure you get the home you need.
It’s also important that your home’s construction process doesn’t deviate from the plans that have been reviewed and approved by VA. This is due to the appraisal process used to issue loans. If an original design is discarded and the home is completed with differences – even relatively small or inconsequential design differences – it can have an affect on its final value, affecting the loan.
Aside from these requirements, VA construction loans are a form of finance that’s generally rather hands-off and borrower-friendly. However, it’s also important to point out that while VA are active during the home’s planning and construction process, it’s unlikely that the involvement of VA will continue after its completion. This is a finance and appraisal process, not one for consumer help.
Alongside this, VA is also not a legal advisor or attorney for you during the design and construction of your home. For the most part, the liabilities associated with building a home are your own – your financing and appraisals are assisted and supported, but many other tasks are not.
Helpful, economically important, and valuable for those most in need of a helping hand, VA loans are a fantastic way to show the support of an entire nation for its service members. For new homes, apartments, or lifestyle getaways, a VA construction loan can help you complete your dream home.