(BPT) - More veterans are taking advantage of an important benefit for service members: A Veterans Affairs (VA) loan. According to data from the Department of Veterans Affairs, more than 1.4 million VA loans were taken out in 2021, a 15.6% increase from the previous year. However, there are still many veterans who are not using this important earned benefit for their service and sacrifice for the country.
VA home loans allow veterans and active-duty service members to obtain home mortgages with more favorable terms than other loans on the market. A VA loan is a mortgage supported by the U.S. Department of Veteran Affairs and serviced by authorized lenders, like loanDepot, one of the nation's largest non-bank retail mortgage lenders.
Why aren't more veterans and active-duty service members using this benefit? Many are unaware of how to qualify for a VA loan or its benefits.
Eligibility and benefits
You may be eligible for a VA loan if you are an active duty servicemember with at least 90 days of continuous service, or if you are a veteran who served on active duty and was honorably discharged meeting minimum requirements based on your dates of service. National Guard and Reserve members who meet certain criteria are also eligible.
While there are a number of VA loan options, typical benefits can include:
- No down payment
- Competitively low-interest rates
- No private mortgage insurance
- Limited closing costs
- Funding fee waived for disabled veterans
- Lower credit minimums
'A VA home loan is one of the most powerful tools our nation's veterans can use to purchase a home and build long-term wealth,' said Patton Gade, loanDepot branch manager and former U.S. Army officer. 'Yet, it surprises me just how unknown and misunderstood these loans are among the people who have earned them. With all of the misconceptions out there, it's important to work with a mortgage professional who specializes in VA loans, so you can better understand and unlock their full potential.'
Even knowing about the advantages of VA loans and that you may be eligible, you may still be unsure about using this earned benefit because of popular misconceptions.
1. Myth: A VA loan can only be accessed once
Many veterans are under the impression that you can only access a VA loan once. However, you can use and reuse the VA benefit again and again. There is no limit to how many times you can use the VA loan program as long as you remain eligible.
2. Myth: You can only have one VA loan at a time
Sometimes you may have to finance multiple properties at once. Under certain conditions, with a VA loan, you may be able to finance multiple homes simultaneously, including your primary home, rental properties and vacation homes.
3. Myth: VA loans are less preferable to sellers because they have a lot of restrictions
A VA loan may take a few days more to close versus a conventional loan, but that doesn't necessarily make them more restrictive.
VA loans have additional controls in place to protect the veteran and their family; e.g., appraisals have to be completed by a VA-approved appraiser, which may increase the processing time of the loan.
4. Myth: The appraisal process for VA loans is more stringent and difficult than a conventional loan
The appraisal process is similar to a conventional loan. The VA approves and hires local appraisal professionals to ensure a smooth process.
5. Myth: VA loans take forever to close
Working with a lender that specializes in VA loans and understands how they work can prevent issues that may slow the process. They can help to keep everything moving on time so you can get the home of your dreams with minimal delays.
If you're thinking of taking out a VA loan, be sure to work with a lender who has specific expertise with the product and working with the veteran community, so they are well prepared to help you.
