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Veterans, Need a Less Expensive Home Loan?

Posted by The Aramco Group on Tue, Mar 3, 2015 @ 11:03 AM

Americans Who Served Our Country Get Help Affording the Homes of Their Dreams Whenever They Need

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What is a VA Loan?

A VA Loan is a home loan that is open exclusively to eligible Veterans of the United States Military and DoD, and their eligible surviving spouses. The loans are insured by the Department of Veterans Affairs and often allow veterans to get better rates than they would otherwise be able to with other sources of financing. 

While the loan is a home loan, there are no instructions or limitations on how a veteran must spend the money they qualify to borrow. Veterans use the loan for a variety of reasons, but the two most common are the reassessment of one’s mortgage payments or the consolidation of—possibly many—other debts into a more manageable package spread over the life of the loan. The loan may be used for either purchase or refinance of your home. 

ARAMCO Mortgage has worked with all ages of Veterans, active and retired, from all of the branches of the Armed Services. The servicemen and service women that contact us range from 25 to 80 years old with the average age of a service member seeking a VA Loan being in their mid 40s. Most—but not all— have already completed their transition back to civilian life.

A VA Home Loan makes more money available to the Veteran than another type of loan would. The Department of Veterans Affairs’s insurance on the loan allows lenders to provide cash equal to 100% of the home’s value with no money down — depending on how much money any particular Veteran qualifies for and assuming the sales price doesn’t exceed the appraised value. 

Generally speaking the lender is also more lenient with credit score requirements for qualified VA Loans. It is ARAMCO’s experience that most home loans underwritten by Freddie Mac or Fannie Mae have required borrowers to qualify with credit scores in the low 700s (e.g. 720), and only very few borrowers qualified with FICCO scores lower than that. A score of 640 is about the lowest our office has ever seen for conventional financing. Our loan officers have been able to originate VA Loans for Veterans with credit scores as low as 580 however.   

The VA Loan is one of the least expensive home loans to originate. The VA ensures that there are no private mortgage insurance premium requirements. VA rules limit the amount you can be charged for closing costs. Closing costs may be paid by the seller. The lender can't charge you a penalty fee if you pay the loan off early. And the VA may be able to provide you some assistance if you run into difficulty making payments. If you have disability benefits, any disability benefit score at 10% or above waives the VA Loan’s origination fees. 

Even though VA Loans come with more favorable terms and the preceding paragraphs provided examples of those benefits, specific terms are all particular to each individual borrower’s situation. Your situation may be different. ARAMCO will work with you to find out if you qualify. 

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Topics: veterans, Military, VA Loans, Refinancing, Department of Veterans Affairs, Home Loan