How to Use a VA Loan
If you served in the military, you may well be eligible for a VA loan. A Veteran’s Affairs mortgage loan allows qualified veterans to purchase a home with and interest rate lower than the typical California mortgage rate, and VA loans don’t require down payment. As the VA loans are backed by the government, they are also helpful to borrowers who might not otherwise qualify for the best interest rates. Here’s how to use a VA loan.
Determine if You Qualify
The first step to using a VA loan is to determine if you actually qualify. To qualify you must be on active duty in the United States military for a specific period of time. Military personnel who served prior to 1980 (1981 for officers) must have been on active duty for 90 days or more in World War II, The Korean War or Vietnam. You also qualify if you were on active duty at least 181 days during peace time.
After 1980/1981, you must have served at least 24 months on active duty unless you were discharged with a service disability. If you’ve already been discharged, you must be honorably discharged. If you served six years as a reserve, you also qualify for a VA loan. Finally, if you attended a United States military academy, you’re qualified.
Get Preapproval
As with any home loan, you’ll want to go through the preapproval process before shopping for a home. Determine how much home you can comfortably afford and work with a bank to cleanup your credit and apply for a preapproval. This tells sellers you can get a loan to buy their home, upping the chances of your offer being approved.
Shop for a Home
Shop for a new home once you’re preapproved for a specific price range. When you find the home you want, put in an offer and follow through on the sale and purchase procedures. When your offer is accepted, complete any outstanding areas of the financing, which shouldn’t be many thanks to your preapproval, have the home appraised and follow the bank and government procedures for closing on the loan. This will likely entail obtaining proof of your eligibility from the local VA office, having the home valued by the government and signing countless pieces of paper.
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Posted in Business & Finance, Real Estate
