For veterans, active-duty service members and some spouses, VA home loans can be a great way into homeownership. However, they differ from a traditional home loan in some key ways. Find out if a VA loan is right for you, and if so, what you should expect.

What is a VA home loan?

A VA loan is a mortgage loan in the United States that is guaranteed by the U.S. Department of Veteran Affairs. They often come with better terms than a traditional mortgage and can be easier to qualify for.

How does a VA home loan work?

1. Eligibility – Determine if you are eligible for a VA home loan based on service and discharge requirements.
2. Get prequalified – Find a VA lender and get a prequalification done so that you can get an estimate of how much you can afford based on your income, credit, and other factors.
3. Get preapproved – A much stronger step then the prequalification. This will put you into a position to actively submit offers on properties of interest. During this process, lenders will verify your income and financial information to get a clear sense of how much you can afford. This letter shows that you are a strong and serious buyer.
4. Submit an offer – When you find the perfect home, its time to contact your agent and create an offer with your desired price and terms and submit to the seller. At this time, it is important to talk over a negotiation strategy with your real estate agent, should the seller decide to counter. It is important to work with a VA home loan savvy agent you trust that also knows the ins and outs of VA home loans and the next steps.
5. VA appraisal and underwriting – Once you have agreed on price and terms with the seller, you are now under contract! Your lender will then order a VA appraisal of the property. Underwriters will evaluate your income, finances, and all other related documents along with the appraisal once it is finalized. If everything is approved, you’ll be issued a clear to close and move on to the VA home loan closing.
6. Closing – You will sign many different types of legal documents and paperwork at your VA home loan closing. Once all is complete and the property is recorded, you get the keys to your new home!

Why are they so great?

• Use VA Home Loan More Than Once – (For example – You end up selling on the house and buying another one later on.)
• Potentially Lower Interest Rates – Since the VA guarantees a portion of the loan, they are less risky for lenders, because the guarantee protects the lender. As a result, lenders might offer you lower rates than you could get with a traditional mortgage. **different lenders will offer different interest rates and terms on VA home loans, so it’s worth taking some time to shop around for the best deal for you.**
• No Downpayment / 0% Down – another huge benefit is that you aren’t generally required to make a down payment, which means, you could finance 100% of the home’s value.
• No  Mortgage Insurance – Lenders typically require buyers to put at least 20% down of the home’s value for a traditional home loan. If the buyer does not put down 20% or more, they will likely have to pay private mortgage insurance, which can significantly add to the cost of the loan.
• Limits The Buyer’s Closing Costs – The VA rules limit the amount you can be charged for closing costs.
• Closings Costs May Be Paid By Seller – A savvy real estate agent can help you negotiate closings costs to be paid by the seller.
• No Prepayment Penalty – The lender can’t charge you a penalty fee if you pay the loan off early.
• VA Assistance – The VA may be able to provide you some assistance if you run into difficulty making payments.

Who can qualify for a VA home loan?

This program is for military members currently serving in the U.S. military, American veterans, reservists, and select surviving spouses. If you are active duty and have served for 181 days (or 90 days in a war), or are the spouse of a veteran who is MIA or has died as a result of duty, or if you are former military and have been honorably discharged, you are eligible. If you are eligible, you can apply for a VA home loan at any time during or after your service.

Click the button below to see all VA approved homes in San Diego County

Click the button below to see all VA approved condos in Downtown San Diego

Downtown San Diego VA Condo Building Guide

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*Disclaimer: Information deemed reliable but not guaranteed.