VA Loan Explained
Becoming a homeowner is part of the American dream, but not one that everyone can realize. In these trying financial times, it can be difficult to obtain an affordable loan to purchase a new home. While many people have to put off buying a new house for the time being, qualifying veterans can still apply and get approved for VA Loans. The US Department of Veteran’s Affairs extends many benefits to its veterans and military servicemen and women, and none have been as helpful as the loan guaranty program.
The G.I. Bill
In 1944 Congress passed the GI Bill which made widespread benefits available for its veterans and their families. The loan guaranty program was just one of many benefits that were signed into action that year. The new program gave the VA the authority to guarantee loans for the purchase of a house, farm or business for its veterans or their surviving spouses. The guaranty meant veterans could purchase houses with no down payment and lowered interest rates. It also made it possible for veterans to buy homes in rural parts of the country where funding was not generally available. The program made the dream of homeownership a reality for its veterans, and since 1944 millions of veterans and their families have taken advantage of the VA Loan guaranty.
Today, the VA Loan guaranty program is still helping veterans purchase homes across America. In order to qualify, you must have served 181 days of regular active-duty service. For ex-military personnel, you must have served 181 days or 90 days overseas during wartime and been honorably discharged in order to qualify. There are also some special circumstances that qualify, such as the widow of a veteran killed in combat, or a veteran discharged early due to service-related injury.
Benefits of a VA Loan
The benefits of a VA Loan are extensive. The biggest benefit is being able to purchase a house with no money down. The VA guarantees up to half the total amount of the loan, so not only do you not have to pay any money up front, but you also won’t be required to pay private monthly insurance. Besides the lower costs of obtaining the loan, with a VA guaranty you can often negotiate a much lower interest rate than what conventional loans are going for. Overall, the VA has made the loan process as easy, flexible and affordable as possible for all its veterans.
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