VA Home Loans

A VA loan is a mortgage loan guaranteed by the Department of Veterans Affairs (VA). They are designed to provide favorable financing options for veterans, service members, and their families, offering unique benefits that make homeownership more accessible.

To qualify for a VA loan, you must meet specific eligibility criteria established by the Department of Veteran Affairs:

1. Service Requirements: Generally, veterans, active-duty service members, National Guard members, reservists, and eligible surviving spouses may be eligible for VA loans. The length and type of service may affect eligibility.
2. Certificate of Eligibility (COE): To apply for a VA loan, you’ll need a Certificate of Eligibility (COE), which verifies your eligibility for the program. This document can be obtained through the VA or with the assistance of your mortgage professional.

Tip: Did you know that the COE may be obtained if a service member has been honorably discharged and meets at least two service requirements? These requirements fall under qualifying wartime and peacetime periods, the dates of active duty, and minimum service.​

Did you know? U.S. citizens who served in the following organizations may also qualify:

• Armed forces of a U.S. ally during World War II
• Air Force Academy
• Coast Guard Academy
• Public health service officers
• U.S. Military cadets
• Midshipmen of the U.S. Naval Academy
• National Oceanic and Atmospheric Administration officers
• Merchant seaman who served in World War II

Spouses of veterans may apply for a VA home loan if they meet specific requirements. For example, if a spouse's partner is missing, a prisoner of war, or if remarriage has not occurred after a service-induced disability or death, they may qualify for a VA loan.

A spouse who remarries after reaching age 57 may also apply for a VA loan.

Since the government guarantees VA loans, VA loans provide access to unique benefits, including:

• No down payment required: This is the most attractive feature of a VA loan for many service members. You can become a homeowner without having to save for a down payment. This benefit eliminates the need to save for a large down payment, making homeownership more attainable.
• Lower interest rates: VA loans often come with competitive interest rates, which can result in significant savings over the life of the loan. Lower interest rates translate to more affordable monthly mortgage payments.
• No Mortgage Insurance: Unlike conventional loans, VA loans do not require private mortgage insurance (PMI). This can save borrowers hundreds of dollars each month, further reducing the overall cost of homeownership.
• Flexible Credit Requirements: VA loans have more lenient credit score requirements compared to conventional loans. While the minimum credit score is required, VA loans often offer more flexibility for borrowers with less-than-perfect credit histories.
• No prepayment penalty: With a VA loan, you can sell or refinance at any time without paying a fee.
• Reduced funding fees: You may qualify for a reduced VA funding fee on a purchase mortgage or exemption from VA funding fees for Veterans receiving service-connected disability compensation.
• Ability to finance the VA funding fee: The fee can be rolled into the entire loan amount.
• Future Opportunities: Streamlined refinancing programs such as Up to 100% Cash-Out, including the funding fee: Use your home's value and pull cash out to pay off debt, repair your home, remodel, or spend any way you wish.
• Assumable Loans: VA loans are assumable, which means that if you decide to sell your home, the buyer can take over your existing VA loan, subject to VA approval. This feature can be an attractive selling point and potentially make your home more marketable.

Purchasing Your First Home

Purchasing a first home is an exciting milestone in any person's life. The process can be intimidating. Here at Carrington, we do not want it to be. That's why we’re here to help educate and assist you along the way. If at any time you need assistance, please reach out to our Homeownership Concierge.

How Much Can I Afford?

“What can I afford?” This is a common question. There are many factors that determine what a reasonable mortgage payment should be, including annual income, existing debt payments, and down payment (if any), as well as additional costs like homeowners’ insurance and property tax.

Carrington Mortgage Services provides a handy Mortgage Payment Calculator to help homebuyers find a monthly payment that’s comfortable for them.

Getting Preapproved

The first step toward securing your loan is getting preapproved. A pre-approval will assure a seller that you are prepared and have walked through the finer details with the mortgage professional vs. a prequalification. The approval process is a comprehensive analysis to determine your credit ability. Preapproval

Should I use a Real Estate Agent?

When using your VA loan benefit, it's important to find a real estate agent who has experience and knowledge of VA loans. With the Carrington family of companies, you have full access to a local professional realtor through Vylla.

Two Great VA Loan Refinancing Options

A Streamline Refinance allows veterans with a VA Loan to refinance into a lower interest rate, reducing monthly mortgage costs. Streamline refinance loans feature little paperwork and often require little-to-no fees out of pocket. Borrowers can roll closing costs into their overall loan amount. Some homeowners can also secure a Streamline refinance without an appraisal.

The other popular option, known as the Cash-Out Refinance, allows borrowers to tap into their home's equity and use it as cash. This type of refinance is available to any qualified veteran homeowner, regardless of whether they have an FHA, USDA, or conventional loan.

Tip: The VA loan has five basic steps: preapproval, house hunting, getting under contract, underwriting, and closing.

At Carrington, we strive to make the VA loan process as smooth as possible. Here is a simplified outline of the steps involved:

1. Pre-Approval: Begin by getting preapproved for a VA loan. This step will help you understand your budget and provide confidence when making offers on properties.
2. Home Search: Once pre-approved, you can confidently start your home search, knowing your budget and what you can afford.
3. Loan Application: After finding the perfect home, our experienced team will guide you through the loan application process, gathering the necessary documentation and ensuring a seamless submission.
4. Underwriting: Our underwriting team will review your application, verify your financial information, and assess the risk associated with the loan. Additionally, reviewing the appraisal and inspections for final approval.
5. Closing: Once your loan is approved, you’ll proceed to closing. The necessary legal documents are signed during this phase, and property ownership is transferred to you.

Each state’s exemptions are different. Please click the link to your state below.

Tip: Some counties require you to resubmit each year for tax exemption stats. Keep a reminder set to resubmit your paperwork.

How many times can I use a VA Loan?

Once you are eligible for a VA loan, that eligibility lasts the rest of your life. How many times you can use your VA loan and what you can use it for depends on your degree of entitlement. The amount of your entitlement depends on the terms of your individual loan agreement.

What is a VA Loan Entitlement?

A VA loan entitlement is the amount for which the borrower's VA loan is guaranteed to their lender in the event of the borrower defaulting on their mortgage.

What Are the Borrowing Limits on a VA Loan?

There will be no maximum loan amounts on VA loans in 2022 for eligible borrowers with full loan entitlements. However, according to the Department of Veterans Affairs, those with remaining entitlements have a VA loan limit based on the county loan limit where they live.

Can I Refinance a VA Loan?

Yes, borrowers can refinance a VA loan. VA loans can be refinanced as either VA Cash-Out Refinance Loans or VA Interest Rate Reduction Refinance Loans (IRRRL).