For those who’ve served in the United States military, VA loans provide one of the best, most powerful ways of pursuing homeownership. Unlike more traditional loans, VA loans generally don’t require any kind of a cash down payment; they offer low interest rates, and the loan terms are quite flexible. It’s no wonder that VA loans have remained so popular since their 1944 inception.

Before pursuing a VA loan, however, it’s important to know some of the specifics. In this post, we’ll offer a few quick facts about VA loans—what they are, how they work, and how you can benefit from them.

How VA Loans Work

• Just like with conventional loans, it’s important to get prequalified and pre-approved. When you meet with a VA lender, you can ask about getting prequalified, which will give you some sense of how much home you can afford and what kind of loan terms you can expect. Also ask about getting pre-approved, which will make the actual loan application process much quicker and smoother.
• VA loans are reusable. Veterans are permitted to use their full VA loan entitlement over and over again—just so long as they pay off the loan each time.
• You can’t use a VA loan for just any type of home. First and foremost, these loans are approved for primary residences only—meaning you can’t use a VA loan to get a vacation home or a rental property. Also, the VA loan requirements specify homes that are more or less move-in ready. If you try to use a VA loan for a “fixer upper,” the lender may very well turn you away.
• You can get a VA loan even if you have a suboptimal credit history. In fact, veterans who’ve struggled with bankruptcies, bad credit, or foreclosures in the past can still qualify for great rates on a VA loan! You don’t have to let your history hold you back from your dream of homeownership.
• You don’t have to worry about mortgage insurance. Normally, if you don’t make a 20 percent down payment, your mortgage lender will require you to purchase private mortgage insurance—which can be pricy. But with a VA loan, you don’t have to worry about that; the VA itself guaranties your loan, at no expense to you.
• You may have to pay a fee. While VA loans don’t have insurance requirements, they do come with a service fee—though you can roll this into the loan amount if you’re unable to pay it upfront. And, if you have a disability connected to your military service, you can often have this fee waived altogether.

If you’re ready to learn about getting prequalified and pre-approved for a VA loan here in Los Angeles, we invite you to contact our lenders today. We’d love to answer your questions or to walk you through the application process. Contact our Los Angeles home mortgage team right now!