VA Mortgage Loans
Senior veterans of the U.S. Military are sometimes not aware of benefits available to them under the guidelines of VA mortgages. Veterans in their senior years do not always realize that benefits available to them in their younger days still apply today.
Learn about your home loan benefits and how you potentially qualify for a VA mortgage, even if you had one in the past.
What is a VA Mortgage?
The U.S. Department of Veterans Affairs explains that the VA assists active duty service members, veterans and their eligible surviving spouses in becoming homeowners. This is true whether this is your first home or you had a VA mortgage in the past and paid it off. Veterans obtain mortgages whether they recently left the military or left the military decades ago.
Private lenders such as banks and mortgage companies provide VA Home Loans, with a portion of it guaranteed by the VA. If you are a senior veteran thinking of applying for a VA mortgage, but have some reservations, there are likely some benefits you are not aware of regarding the VA mortgage process. Senior veterans have the option of obtaining a VA mortgage with a fixed rate or adjustable rate. Purchase an existing home, a new-build home, a condo, duplex or manufactured home.
Your home has to serve as your primary residence. One reason VA mortgages are popular with seniors that know about them is the definition of “Primary residence” provided by the Department of Veterans Affairs. They consider a home your primary residence if you reside in it “Most of the year.” Therefore, if you reside in the home for six months and one day, you live in it most of the year. Some senior veterans enjoy taking out a VA loan to purchase a primary home or vacation home.
You are potentially eligible to obtain financing for a VA home loan as a veteran if you meet at least one of these basic eligibility requirements, listed by Tim Lucas, editor of The Mortgage Reports:
- You served at least 90 days of active duty during wartime
- You served at least 181 days during peacetime
- Your spouse was killed in the line of duty and you have not remarried
- You served six years in the Reserves or the National Guard
Documenting your eligibility is part of the application process for your VA mortgage. Any VA-approved lender has access to Automated Certificate of Eligibility System, allowing the lender to obtain your Certificate of Eligibility (COE). You can order the COE yourself through the VA portal or choose to provide your DD-214 form to the lender or the VA.
The VA Home Loan Guaranty
Although the VA guarantees a portion of the mortgage for senior veterans, the Department of Veterans Affairs typically does not involve itself in the actual mortgage approval process. The VA simply stands behind the loan, guaranteeing a portion of your loan.
The VA does charge a funding fee, paid up-front, which helps defray the cost of the program. The funding fee helps make the VA loan program sustainable for future applicants.
You do not have to pay cash-up-front to cover costs of the funding fee. Lenders include the funding fee in the VA mortgage for seniors.
VA Mortgage Benefits for Senior Veterans
There are multiple benefits of taking advantage of your VA mortgage benefits. Many eligible veterans, explains Tim Lucas in an article published by the Department of Veterans Affairs, are not aware of the advantages of a VA home loan. One reason is that lenders frequently fail to educate veterans, including senior veterans, about the program. Some lenders are not informed of benefits available under the program themselves.
Some senior veterans likely think the process is very difficult and that they should avoid applying for a VA home loan. Quite the opposite is true when it comes to VA mortgages. There are many benefits to obtaining a VA home loan.
One primary benefit is that when seniors obtain a VA home loan, their mortgage does not require a down payment. Avoid the large down payments often required by other types of mortgages when you receive approval for a VA home loan.
Save money upfront with no private mortgage insurance requirements and low closing costs.
Veterans, including senior veterans, discover that there is more flexibility in the requirements of a VA home loan. Many borrowers obtain a VA mortgage with less-then-perfect credit. A bankruptcy or foreclosure does not automatically disqualify you from obtaining a VA home loan. Veterans that were denied other types of home loans should still apply for a VA mortgage. The flexible guidelines often mean that veterans still receive a VA home loan.
Surviving spouses are potentially eligible for a VA home loan. Surviving spouses do not pay the funding fee, and are eligible to purchase a home with no down payment, receiving the benefit their veteran spouse that either died in action or died as result of a service-related disability would have received had they survived. Spouses also have VA loan eligibility if their veteran spouse is missing in action or is a prisoner of war at time of application for a VA mortgage.
Another benefit of a VA mortgage is the fact that you can use it more than once. Did you outgrow the home you previously purchased through the VA home loan program? Perhaps the kids are grown and you need to downsize now that you are empty-nesters.
You can use your benefit of obtaining a VA mortgage repeatedly, even after reaching your senior years. If you paid off the prior mortgage and sell your home, apply for another VA loan. It is just that simple to use your benefits again for the type of home you want today.
Your eligibility benefits for a VA mortgage do not expire. Perhaps you rented all your life and want to purchase your first home, even though you are now a senior veteran. Discover how easy it is to purchase your first home with a VA loan decades after leaving the U.S. Military.
Other Benefits of a VA Mortgage
VA home loan benefits are not always used to purchase a home. Seniors and other veterans have the opportunity to refinance their current home, even if the current home was not purchased with a VA mortgage.
If you have difficulties making your payments the VA is sometimes able to provide assistance to homeowners that obtained a VA home loan. Through Mortgage Servicing Assistance, the VA provides guidance to servicers when borrowers face foreclosure. The VA Regional Loan Centers provide counseling that may help veterans avoid losing their home.
Never agree to any proposition made by someone you do not know that claims they can back up your payments. Seniors that “Sign on the dotted line” not knowing the person is a scammer, often find out too late that they actually signed a deed. Legal action sometimes occurs when the veteran then cannot meet terms of this new contract.
The VA warns veterans to either ask their servicer or a member of the Loan Guaranty Division at their VA regional office before signing any such documents.
VA mortgages provide outstanding opportunities for seniors that want to purchase a home or refinance their current home. Discover your benefits when you apply for a VA home loan.