VA Home Loans-Ensuring Homes for Veterans in the US

VA loans are home loans available to the veterans of US army. These loans were first approved in 1944, under the guidance of President Roosevelt. Since then, they have benefitted millions of veterans and given them a chance at homeownership and a secure family life.

VA Home Loans: Making Home Ownership a Possibility for Veterans
Every state in the US accommodates the veterans by offering various benefits like easy home loans and special rehabilitation programs including the state of Texas. VA home loans are easily available for them through government as well as VA approved private lenders.

Taking note of the various problems that veterans face such as bankruptcy and poor credit scores, the department of Veteran Affairs designed the rules and regulations for VA loans in such a manner  that it is very easy to qualify for them as compared to other types of loans.

What  makes VA Loans Easier than Others?
1. Zero down payment
2. Easy repayment plans
3. Loan amount upto 100 percent of property value
4. Penalty Free Prepay System
5. Flexible interest rates

As mentioned before, the government policies are very lenient about the VA home loans and there are just a few pointers that decide the qualification of a veteran.

Honorable Discharge
VA home loans’ primary criteria is that a veteran applying for it must be  honorably discharged from the armed forces. Rest all the qualifying criteria such as credit scores, down payment and EMI, are flexible and have easy clause attached to them that makes almost every veteran eligible for a VA loan and also for refinance  of VA loan.

Time Service Record
A veteran who has served before 1980, has to show a war time service record of 90 days to qualify for the loan whereas those  who joined and served post  1981 have to show the service record of 2 years. Anyone below this time limit also qualifies, if the reason behind their discharge is service related disability.

Conclusion
So, this is how easy it is for veterans to qualify for a zero down payment in the state of Texas. VA home loan is definitely the reform that has benefited millions of veterans in the US since 1944.

A Brief Guide on VA Loan Refinancing

VA loans have several advantages over the conventional loans such as lower interest rate, no down payment hassle and lenient credit score terms. Besides these, VA loans are easier to refinance.

Only a few veterans default on their VA mortgage due to which the Department of Veterans Affairs offers a guarantee of 25 percent of the property's value price to the lender in event of a foreclosure. So, for lenders too, a VA loan has lesser risk involved.

VA Loan Makes Home Refinance Easier

Refinancing is the replacement of existing debt obligation with another debt obligation in different terms. There could be several reasons behind debt refinancing such as:

● To take advantage of better interest rate
● To consolidate other debts into one
● To reduce monthly repayment amount (may be for a longer term)
● To free up cash

Refinancing a loan multiple times can negatively impact the financial benefit of the borrower. Nevertheless, if we talk about home refinance for VA loan, the long-term impact might not be that bad. An individual can borrow more of the value of the home (100 percent in some cases) without VA backing. Whether a borrower wants to take another VA loan to reduce the monthly payment amount, wants some cash back from the refinance or has been delinquent on VA loan, there could be different reasons behind filing for a VA loan refinance.

There's no lower or higher limit for refinance with VA loans. In some cases, one can refinance up to 100 percent of the home's appraised value

VA Refinancing Options

Streamline Loan
For those who want to take advantage of low interest rate, streamline loan is the right option. Veterans with a history of timely payments, who want to refinance the existing VA home loan are eligible for the loan. VA doesn't ask the borrower for any certificate of eligibility, income documents or credit report.

If the area where you live or interested in buying a property has a low real estate value, streamline loan might be the only refinancing option suited for you. The reason being, the borrower doesn't need an appraisal for the property. The purpose of streamline loan is to reduce monthly payments, so borrowers can't ask for cash back or consolidate their other loans in any circumstances.

Cash-out Loan
Borrowers who have equity in home and need cash to pay off debts, improve their home or buy a car can opt for cash-out refinance. But, they should be living in their home and obtain a certificate of eligibility to get the loan. Unlike the streamline loan, it might take more time to get the cash-out loan approved and the borrower should also requalify and have the home appraised for the process.

Refinancing Delinquent Mortgage
The borrowers who are finding it difficult to keep up with the mortgage payments and other bills can ask for reduction of interest rate. They need to submit the application for prior approval, go through credit approval and underwriting for the refinancing of loan payment that has been delayed by 30 days or more. If the borrower doesn't have a financial mismanagement history, he might get the refinance loan approved.

Summarizing It Up!
VA wants to benefit the borrowers with the refinancing option. Lenders have to show the interest rate and monthly payments for the new and old loan as well as how much time it will take a borrower to recoup the closing cost with the lower monthly payment on the new low. This is something that other traditional loans lack in; therefore exploring other options won't be of great help if you are already eligible for a VA refinance.