What is a VA Loan?

VA, also known as the Department of Veteran Affairs, offers to qualifying current and ex-members of the Armed Forces (to include the Reserves and National Guard) guaranteed mortgages up to 100% of the value of the property they are purchasing. Based upon a person's "eligibility", home loan amounts can be as high as $417,000 in Arizona.

VA home loans are fixed rate mortgages with terms of either 15 or 30 years. Since the VA guarantees the mortgage, there is no mortgage insurance. However, the VA requires the borrower to pay a funding fee ranging from 0.5% to 3.3% for the mortgage (this fee is waived for qualifying disabled veterans). In addition, VA home loans are fully assumable by a qualifying borrower. VA guaranteed loans are made by mortgage lenders, such as Sun Nations Mortgage. If the home loan is approved, VA guarantees the loan when it is closed. The guaranty means the lender is protected against loss if you or a later owner fails to repay the VA home loan.

Whether you are buying your first home or this is your fiftieth, the steps involved in purchasing a home with your VA benefits are the same. It is important to review the entire process before beginning. By doing so will only ensure a smooth and easy home buying transaction for you.

Steps involved in using your VA home loan benefits:

1. Determine if you are eligible for VA home loan benefits. This is a two part step that will begin the process. First, talk with a mortgage lender familiar with VA loans in order to see how large of a VA home loan you will qualify for. You should take into consideration not only the price range you desire but also the monthly payment you wish to have. 
2. Request your Certificate of Eligibility which will determine how much entitlement you have remaining. 
3. Find a real estate agent to assist you in buying a home.  Find an agent that you feel comfortable working with and an agent that believes he or she works for you (instead of the other way around). Remember, the seller can pay for all of your closing costs so be sure to find an agent that is savvy enough to negotiate this into the contract.
4. Once you have found a property and the seller has agreed to a sales contract, you will need to obtain full VA loan approval. This step may differ upon your choice of lenders but should consist of the following applying for the loan, determining the value of the property with a VA appraisal and Certificate of Reasonable Value, title search, and submission to an underwriter for approval 
5. Upon approval, you will go to the title/escrow company to close on the purchase of your home. This is the step where you will sign the mortgage/deed of trust, the note, and other pertinent closing documentation.
6. Upon closing, you should receive the keys to the home and the property legally becomes your own.

Though this is a simplified version of the process, it does outline several key points that you need to be aware of:

• Find out how much you qualify for before beginning the home search. In this step, you should also be able to identify any potential hurdles that would impede or prevent you from buying a home. ·
• Request your Certificate of Eligibility before beginning the home search process (this could take several weeks to receive and has the potential of delaying the process). ·
• Find an agent that knows how to negotiate! Too many veterans are buying homes for $0 down and NOT paying any closing costs because they have a competent real estate agent working for them. Don't be left out of the crowd.

For more information on using your VA benefits, give us a call a call at 602-993-7509.