VA Loans: Rates, Eligibility Requirements And More in USA

What Is A VA Loan? A VA loan is a type of government loan, backed by the Department of Veterans Affairs (VA)

For qualifying veterans, service members, and surviving spouses, a VA loan is a valuable perk of military service. Even if your credit isn't flawless, it permits you to qualify for a low-cost mortgage when buying or refinancing a home.

You may be qualified for a VA loan if you are currently serving in the military or are a veteran.

How Do They Work? The Veterans Administration does not make VA loans, but they do determine who qualifies for them and which lenders offer them. VA loans come in a variety of forms, and because they're backed by the government, they're less risky for lenders.

VA loans are appealing to people who qualify since they do not need a down payment. They also have lower interest rates than many other forms of mortgage loans available for the same length of time. They don't have to pay for mortgage insurance on a monthly basis.

Who Qualifies For A VA Loan? To be eligible, you must meet at least one of the following requirements: During peacetime, you've completed 181 days of active duty. You've been in active duty for 90 days in a row during the conflict. You've served in the National Guard or Reserves for more than 6 years, or 90 days under Title 32, with at least 30 of those days being continuous.

What is a Certificate of Eligibility (COE) and how does it work? A Certificate of Eligibility (COE) is a document that verifies your eligibility for a VA home loan to your mortgage lender. You must show proof of service to obtain a COE. Depending on whether you're an active-duty military member, a veteran, or a surviving spouse, you'll need different documentation.

Other Requirements for VA Loan Eligibility You'll need your income, assets, and credit, as well as the property you're buying, to check out once you've verified that you meet the service criteria for a VA loan.

How To Apply For A VA Loan: 6 Steps

1. Secure A Certificate Of Eligibility (COE) VA-approved lenders, like Rocket Mortgage, can help you get your VA certificate of eligibility quickly with proof of service.

2. Get Preapproved When buying a home, get preapproved early on. The approval will give you a baseline for determining how much you can afford.

3. Shop For A House Whatever property you buy must meet the VA’s Minimum Property Requirements, or MPRs. MPRs ensure the home is safe, structurally sound and sanitary.

4. Make A Purchase Offer Once you find a home you like  in your price range, put in an offer to buy the home.

5. Undergo VA Appraisal And Underwriting Underwriters from your lender assess your finances and make sure you qualify for a VA loan. During a VA appraisal, the appraiser will check that the home meets the VA’s MPRs and is sanitary, structurally sound and move-in ready with minimal repairs.

6. Complete the Purchase of Your New Home When the VA appraiser certifies that your new home is safe and sound, it's time to sign a contract, obtain your loan, and get the keys to your new home.