What are VA Loans?

Written by RateText Team Updated over a week ago

VA Loans are offered through private lenders, mortgage companies or banks. Through this program, the Department of Veterans Affairs works to support the needs of servicemembers, veterans, and qualifying surviving spouses and helps them purchase affordable mortgage loans.

The Department of Veterans Affairs says, “As part of our mission to serve you, we provide a home loan guaranty benefit and other housing-related programs to help you buy, build, repair, retain, or adapt a home for your own personal occupancy.”

How Do You Qualify for a VA Loan?

VA Loan candidates are evaluated based on length of service, duty status, and character of service.

The following VA Loan subcategories are available for consideration – each with differing benefits and options depending on each borrower’s unique needs and circumstances:

VA Loan Advantages

Veterans United says, “For the vast majority of military borrowers, VA loans represent the most powerful lending program on the market. These flexible, $0-down payment mortgages have helped more than 24 million service members become homeowners since 1944.”

Get Started with a VA Loan

VA Loans have many of the same steps as traditional loans. You start with looking for a VA lender and going through the steps for prequalification. This step helps borrowers learn an approximation of what they can afford by examining income, credit, assets, veteran entitlement, and financial indicators.

Following prequalification comes a loan preapproval and the much-sought-after preapproval letter. Preapproval letters validate your borrowing power to real estate agents and other sellers.

When it comes time to make an offer on a home, find an agent who is familiar with VA loans. This will help during the negotiation and contract process.

The next step in the home purchasing process is called being “under contract.” During this state of home purchasing, the lender will ask for a VA appraisal of the property you wish to buy. A VA appraisal differs from a home inspection in that this VA appraisal ascertains if the property meets “fair market value and the VA’s minimum property requirements.

Simultaneously to the VA appraisal, underwriters will examine your income, financial statements, and appraisal to sign-off on moving your loan to closing. An official home closing will require your signature on numerous legal documents before you are officially handed the keys to your new home.

What You May Not Know About VA Loans

Check out our VA loan calculator to determine if this loan product will work for your needs.