In 1944, Congress created the VA Loan Guarantee Program to ensure that returning military service member could achieve their dreams of homeownership. Since the VA Loan Guarantee Program was created, the Department of Veterans Affairs has helped more than 18-million military members purchase their dream home.
What is a VA Loan?
A VA loan is a very powerful and flexible lending option that’s available on the market. Instead of issuing loans, the VA pledges to pay back a quarter of every loan they guarantee if the borrower defaults. This gives the VA-lender protection when lending to military members, leading to competitive rates and terms for qualified veterans.
What You Need to Know
There are a few things service members may not know about VA loans, including:
- They’re only for certain types of homes: VA loans are generally for move-in ready homes that are typically single-family, condominiums, modular housing, and more. If you’re looking for a fixer-upper or hobby farm, a VA might not be for you.
- They’re for primary residences only: this means that if you wanted to use your VA loan for a vacation home, a VA loan may not be for you. You can, however, use your VA loan to buy a multi-unit property, such as a duplex, just as long as you live in one of the units.
- You can reuse it: you’re able to reuse your VA entitlement as many times as you’d like, as long as you keep paying the loans off.
- They’re not issued by the VA: the VA does not issue loans, instead, they provide a guarantee on each loan. They are, however, guaranteed by the government.
- They don’t have a payment penalty: with VA loans, you can make payments anytime you’d like, which saves you a large amount of money in interest over time. You can also schedule to have a little extra money be paid on your loan every month.
If you’re a qualified veteran and have questions about how VA loans work, contact a Pacor Mortgage VA Expert for more information. We can answer any questions you have and help you through the entire process of becoming a homeowner. Give us a call today at 773-881-7744 to set up an appointment, or visit our website to learn more.
References
https://www.veteransunited.com/valoans/10-things-many-borrowers-dont-know-about-va-loans/