VA Home Loans

The VA home loan has made affordable housing for many people who would otherwise be unable to purchase a property. Originally introduced in 1944 it was a program of assistance for servicemen returning from the war to help them get a home for themselves and their families. VA home loans continue to help families purchase a home with affordable down payments. VA home loans cannot be obtained to buy rental purchases to be sub-let. They must be used for primary residence of the veteran and family.

Who is eligible for VA home loans?
There are more than 25 million servicemen and veterans that take advantage of VA home loans. In its simplest explanation a veteran is described as someone who has been involved in active service for at least 90 days during a war or seen active duty of more than 181 days during peacetime. The VA home loans scheme guarantees a veteran 25% of a home loan for their own use and occupation up to a limited amount. Eligibility for the VA home loan program is not automatic and applications will be approved or rejected as seen fit.

Who gives the VA loans out?
VA home loans are not given out directly by the government; rather they are approved via financial institutions and other lenders. The government guarantees the loan to ensure the banks and other financial institutions receive the money in the event of default on payments.

Do I have to get a VA home loan from one source?
The benefit or VA home loans means that you can shop around for the best deal. This is because different lenders are approved to give the loans to veterans. Getting a low rate of interest on your VA home loan is not only sensible; it can be critical in this difficult economic climate. So many people have been unable to afford repayments on their homes due to the rising costs of living but decreasing paychecks. Therefore, choosing a VA home loan with a low rate of interest will at least give you the best possible start with your loan repayment. Some people prefer fixed-rate mortgages and this is entirely possible too. By fixing the interest rate on you VA home loans whilst it is still low will ensure it does not rise sharply when interest rates start to rise again, which they will.

Is pre-approval a good idea?
Pre-approval for a VA home loan is an excellent idea if you intend to purchase property in the immediate future. It is also a good idea to apply for a home loan in principle for the rest of the loan. These two simple steps can also take some of the stress away from buying the home and can give you extra leverage in your purchasing power to reduce the price of the house. Knowing that you have a certain amount of money to spend on your new home can allow you to scan the property market for properties that you would not otherwise consider. You may be able to get the current owner to reduce the price as your pre-approved VA home loan is already arranged and you are ready to go ahead with a quick sale. This is what many people want once they have decided to sell their property.

Knowing that all the criteria has already been checked makes the sale process a lot quicker and there will be just the usual buying procedures to go through, such as having the house checked for defects and building work. Clearly, the financial institution will also have to be happy that your chosen purchase is worth the money otherwise they will not release the loan to you.