VA Loan

VA Loan:

Designed to offer long-term financing to American veterans, VA mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Veterans Administration. The VA determines eligibility and issues a certificate to qualifying applicants to submit to their mortgage lender of choice. It is generally easier to qualify for a VA loan than conventional loans because the credit and income requirements are less strict.  The Department of Veterans Affairs guaranteed loans up to $417,000.  In certain U.S. counties, the 2009 county limits can make the VA loan guaranty even more than the "maximum."

Here's how it works:

  • 100% financing without private mortgage insurance or 20% second mortgage.
  • A VA funding fee of 0 to 2.15% (this fee may be financed) of the loan amount is paid to the VA.
  • When purchasing a home, veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less.
  • When refinancing a home, veterans may borrow up to 100% of reasonable value in order to refinance where state law allows.
  • Closing costs that are the same or less than some other loan programs.
  • No prepayment penalty. 

What are the benefits of VA Home Loans?

Veterans Benefits are available for most veterans.  If you are planning on purchasing a home, the VA home loan benefits are often the best choice.  An advantage of the VA loan would be the ability to get a loan with no down payment.  You could even get fixed loan interest rates that can be comparable or better than conventional rates.

Why do the VA and my lender have different guidelines for VA loans?

Borrowers may get confused about why the lender’s qualifying guidelines are not always the same as the official VA home loan program guidelines that was published by the VA.

The guidelines were established for the VA loan Guaranty Program by the Veteran’s Benefits Administration under the U.S. Department of Veterans Affairs.  However they don’t actually make the loans.  The mortgage companies, banks, savings and loans, and other lenders are the ones that put the money up for the loans.  With many of these lenders there are private investors who also set lending guidelines that can occasionally differ from those of the VA.  The result is that the lenders have to follow both guidelines and the lender’s criteria are often more strict than what is outlined by the VA.

How can my VA mortgage benefits be used to lower my monthly bills?

VA loans can be great for rolling your debt into your mortgage.  You can consolidate bills, pay off credit cards, car loans and many other debts with a VA cash-out refinance.  This will usually reduce your monthly expenses.  Mortgage rates are usually much lower than the outrageously high interest rates on credit cards and other short term debts.  By spreading out the repayment of these consolidated debts, monthly overhead is reduced substantially.  The cash-out refinance is also useful to pay for college, home improvements, or to get cash for other reasons.

Apply for a VA Loan with a VA Qualified Lender.  Call and speak with a Loan Specialist today at 256-760-1591

For more helpful information go to and then click "How can I apply for a VA guaranteed Home Loan?"

Other Loan Programs: Conventional, FHA, AHFA, USDA