What is the VA?

Our Nation's Veterans

Of the 25 million veterans currently alive, nearly three of every four served during a war or an official period of hostility. About a quarter of the nation's population -- approximately 70 million people -- are potentially eligible for VA benefits and services because they are veterans, family members or survivors of veterans.

WHY A VA LOAN?

The more you know about our home loan program, the more you will realize how little "red tape" there really is in getting a VA loan. These loans are often made without any downpayment at all. Aside from the veteran's certificate of eligibility and the fact that the appraiser is assigned by VA, the application process is not much different than any other type of mortgage loan. And if the lender is approved for automatic processing and the Lender Appraisal Processing Program (LAPP), as more and more lenders are now, a buyer's loan can be processed and closed by the lender without waiting for VA's approval of the credit application or for VA to review the appraisal.

Lenders are also able to use VA recognized automated underwriting systems, such as Loan Prospector and Desktop Underwriter, to facilitate the underwriting process.

Types of VA Loans

There are VA mortgage financing products for purchasing homes and refinancing products that allow you to get a better interest rate than a current mortgage or take advantage of equity in a home you already own. VA Refinancing products have become extremely popular in the last few years. Most are designed to reward homeowners who have improved their credit and whose homes have accrued in value since the initial purchase with a lower rate and, therefore, cheaper monthly payments. There are VA loans of this type available, including Streamline products, with less paperwork and qualifying conditions.

Understanding VA Mortgage Financing

The VA offers two basic types of home mortgages. Traditional loans have 15 or 30 year terms (the amount of time it will take to repay the loan) and keep a single interest rate the entire life of the loan. Buyers can use these products to finance up to 97% of the purchase price of a house. Adjustable rate loans have a lowered interest rate for the first two or three years. These products are designed for families that need homes but also need to keep their initial payments low. The assumption is that after this time period when the rate raises the family will be financially secure enough to either handle the new payments or refinance.