VA loans are guaranteed by the U.S. Department of Veterans Affairs (VA) and allow veterans and service personnel to obtain home loans with favorable loan terms and minimal (or no) down payment. Eligibility for a VA loan is determined by the Veterans Administration—service members or veterans who meet the eligibility requirements just need to obtain a Certificate of Eligibility, or COE, which can be provided by contacting VAMortgage.com, a division of 1st Mariner Bank, at 888-256-5387.
Down Payment: No
Appraisal Type: Primary Residence
Requirements to Qualify: More strict than other loan types
Loan Purpose: Home Purchase or Refinance
Home Purchase VA Loans
VA Loans are paid for through a VA funding fee, which represents a certain percentage of the loan amount for which the borrower is responsible. The borrower pays a funding fee for the privilege of obtaining a VA home loan, an amount that is between .5% and 3.3% of the loan amount and is dependent upon the loan to value, the veteran's status, and the loan purpose. The funding fee can be included in the total loan amount and is waived for veterans disabled pre-discharge. You can view a breakdown of VA funding fees on the Department of Veterans Affairs website.
Refinance VA Loans
The VA also offers refinance mortgage programs. Streamline refinances do not have any credit qualifying standards and do not require an appraisal. They can only be used to refinance existing VA mortgages where the mortgage is current and where no more than one payment has been late in the prior 12-month period. Additionally, the refinance must result in a benefit to the borrower in the form of a lower interest rate, lower monthly payments, a shorter loan term, or a conversion from a variable-rate to a fixed-rate mortgage. Closing costs can be included in the new loan amount, but the borrower cannot receive cash back.
VA also offers a full refinance loan that requires credit qualifying and an appraisal, but allows the borrower to receive cash from the transaction, subject to a maximum loan to value of 90%.
For more information about VA Loans or to apply, please visit www.VAMortgage.com, a division of 1st Mariner Bank.