The Veterans’ Administration – or VA – was established in

1930 to coordinate the benefits and legislation affecting war veterans.

Today, the VA is the second largest government department and is

responsible for the affairs of about 70 million people who are veterans,

survivors or family members.

The VA loan program was established in 1944 to assist veterans

returning from war. The program’s aim was to allow veterans to easily

afford to buy a home – and also to thank them for their service and

dedication. Almost 20% of veterans aren’t actually aware of the home

loan program – despite this, over 18 million VA home loans have been

taken out since the program’s inception, totaling well over $500

billion.

A VA loan is basically a mortgage aimed specifically at veterans

and while it works much the same way as a regular mortgage, it does have

several advantages. Typically, a VA loan doesn’t require money for a

down payment or for closing costs – it also tends to come with a

lower interest rate as well.

Around 90% of applicants don’t provide a down payment and most

VA loans close in 45 days or less. And there are usually no penalties

for prepaying a VA loan early. You also don’t need to have private

mortgage insurance as the VA itself guarantees the loan amount.

A VA loan can be used not only to buy a house, but also for a

townhouse or condo as well. Loans can be obtained if you are building your

own home. And if you are thinking of refinancing your current mortgage,

a VA loan is almost certainly going to give you a lower interest rate

– and lower monthly payments. The VA itself doesn’t actually supply

the loan – they insure the loans provided by the lender.

Those eligible for a VA loan include active duty veterans

discharged during World War II or after; active duty personnel with at least

six months of active service as well as members of the National Guard and

Selected Reserve. Around 80% of those who qualify for a VA loan would

not be able to qualify for a regular loan.

If you think you qualify for a VA loan, your first step is to

complete a Certificate of Eligibility. If you aren’t sure whether you

qualify or not – contact a VA loan specialist or a mortgage broker.

Incidentally, the VA puts no maximum on the amount that a person can

borrow; this is determined by the bank or mortgage company.

Once you are qualified for a loan, finding a lender is fairly

easy. A quick search on line will give dozens of lenders who participate.

The VA also has ten regional offices located throughout the country that

can provide advice, as well as provide a list of recommended lenders

in your area. Compare products and services, just as you would with a

conventional mortgage.

Not all lenders are qualified – or willing - to offer a VA loan,

although most larger lenders do offer the service. If a lender offers

FHA loans, they generally offer VA loans too. The VA has strict

requirements regarding potential lenders – the size of facility and number

of staff, financial stability and knowledge of staff.

As a veteran, you are eligible for several benefits – an

affordable mortgage is certainly one of the most important. If you are

qualified – or think that you are – be sure to take advantage of the VA

program.