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 Department of Veteran Affairs—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 877-347-2760.
Down Payment: No
Appraisal Type: Primary Residence, Investment*
Loan Purpose: Home Purchase or Refinance
Home Purchase VA Loans
Although down payments are not required on VA loans, a funding fee is charged. VA Loan Guarantees are paid for through a VA funding fee, which represents a certain percentage of the loan amount. The borrower pays a funding fee for the benefit of obtaining a VA home loan, an amount that is between 0.5% and 3.3% of the loan amount. The funding fee amount 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, so no “out-of-pocket” costs are needed from the borrower, and is waived for veterans disabled during their service. You can view a breakdown of VA funding fees on the Department of Veterans Affairs website www.va.gov.
Refinance VA Loans
The VA offers refinance mortgage programs. Interest Rate Reduction Refinance Loans (IRRRLs) have minimum credit qualifying standards and may not require an appraisal. This type of refinance can only be used to refinance an existing VA mortgage in which the mortgage is current. 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 (ARM) rate to a fixed rate mortgage. Closing costs can be “rolled in” the new loan amount; however, the borrower cannot receive cash back from the transaction.
The VA also offers a full refinance loan that requires credit qualifying and an appraisal, but allows the borrower to receive cash from the transaction. This is called a VA cash-out refinance loan and is subject to a maximum loan to value of 100%.
For more information about VA Loans or to apply, please visit www.VAMortgage.com, a division of 1st Mariner Bank.
* Only available with an Interest Rate Reduction Refinance Loan (IRRRL) in which the home was previously the borrower's primary residence.