For military families in the Charlotte area, there may be no better way to buy a home than to take advantage of the VA home loan program. It’s another way to thank our military members and their families for their service. VA loans offer great benefits to homebuyers who qualify. Take a look.
Top 6 Benefits of VA loans
VA loans are private mortgages backed by the U.S. Department of Veterans Affairs. They provide a government-backed, affordable route to homeownership, with lower costs than most other mortgage programs.
No down payment
Most home loans, even government mortgages such as FHA loans, require at least a small down payment. Not so with a VA loan. You can put 0% down and still borrow for your new home.
You won’t have to pay mortgage insurance, either, as you would with other types of loans. PMI stands for private mortgage insurance, and it’s usually required for home loans where you put down less than 20%. With a VA loan, though, you won’t be required to pay PMI (or MIP, which is a mortgage insurance premium). This benefit can save you hundreds of dollars per month.
Low closing costs
Another great benefit of VA loans is the low closing costs, which are the fees and expenses you’re typically required to pay at closing. VA loans eliminate most of these costs, saving you money and freeing up your budget to enjoy life in your new home.
Variety of home loan options
A VA home loan means you can choose the best mortgage terms for your needs, whether that’s a 30-year fixed-rate mortgage, a 15-year mortgage, a home loan with an adjustable rate, or something else. You can even do a cash-out refinance. You’re not locked into one kind of mortgage when you shop for a VA loan.
Finally, VA loans offer attractive interest rates on your mortgage. This helps bring your monthly mortgage payments down, and will also save you thousands of dollars over the life of your loan. If you qualify for a VA loan, you could lower your overall interest costs by a large amount by choosing a loan with a low interest rate.
See how much you could save by using our Mortgage Calculator.
Use it again and again
VA loans are a lifetime benefit, meaning you can use this type of mortgage more than once. That’s great news for people moving in or out of the Charlotte area. In fact, in 2022, there were almost 2,000 VA home loans in Mecklenberg County alone.
Pros and Cons of VA loans
VA loans offer a ton of great benefits for those who qualify. But is a VA home loan the right mortgage choice for you? You should consider the pros and cons of borrowing with a VA loan so you’re sure it’s a good fit for your needs.
VA Loan Pros
- Lower costs
- Better terms
- Easier to qualify
- Available after financial hardship
Using a VA loan for your new home can be more affordable than other types of loans—especially if you don’t have great credit. If you’ve experienced a bankruptcy or foreclosure, a VA loan can let you buy a home sooner than other types of loans—in as little as two years, in fact. Plus, the rates are the same no matter what your credit score is.
VA Loan Cons
- Loan funding fee
- Only available for your primary residence
- Stricter rules for appraisals
- Must meet eligibility requirements
However, VA loans aren’t perfect for everyone. You won’t be able to use a VA home loan to buy a rental property or a vacation home.
And even though you don’t have to pay a down payment, there is a VA funding fee that you must pay. This fee is between 1.4% and 2.3% of the loan amount (and up to 3.6% if you’ve used a VA loan before).
You also won’t be able to use a VA home loan if you don’t meet eligibility requirements, such as meeting the minimum time in service.
Who can use VA loans
VA home loans are for active duty service members, veterans, National Guard members, and Reserve members. Surviving spouses of veterans can also be eligible for a VA loan, but they’ll need to obtain a certificate of eligibility proving this.
Requirements to get a VA loan
According to the Department of Veterans Affairs, active-duty members are eligible for a VA loan once they’ve served 90 consecutive days.
For veterans, eligibility depends on when you served. For example, if your service was between the Gulf War (Aug. 2, 1990) and today, you must have served for 24 months in a row or at least 90 days straight for the time you were called to active duty. Exceptions are made for those who were discharged for disability.
For National Guard members and reservists serving since 1990, you’re eligible after 90 consecutive days served.
For all service members, the VA provides a list of exactly what you need to know to qualify.
Qualifying for a VA loan
There are no income limits for VA loans. That means you can still qualify for a VA home loan even if you are high income. However, the VA does ask that you show two years of steady income or employment.
Keep in mind, however, that different lenders have their own ways of calculating how much of a loan you will be approved for, and that may include income, debt-to-income ratio, and credit score.
VA Loan Limits
There’s more good news: there’s no limit on loans above $144,000, as long as you have full entitlement. You may not have full entitlement if you’re still paying back a VA loan, if you had a short sale on a VA loan, or you had a foreclosure on your home and did not repay the VA loan in full.
Your lender will still calculate your approval based on your finances, but you aren’t limited by the VA as to how much you can borrow.
How to find the best lender for VA Loans
Not all lenders are created equal. At Fairway Mortgage of the Carolinas, we believe in supporting our veterans above and beyond your average mortgage company, which is why we created the nonprofit American Warrior Initiative (AWI).
The AWI is Fairway’s way of giving back to the veterans in our community and beyond. We work with other organizations to sponsor mortgage-free homes, service dogs, and veterans centers. Many of our employees donate a portion of their wages to this worthy cause. Through AWI, we also provide trainings and certifications that help Realtors and real estate agents learn how to handle the unique needs of military members.
Fairway is one of the top 5 VA lenders in the U.S.
Looking for a home loan in Charlotte, Fort Mill, Weddington, NC or the surrounding areas? We’re here to help. Contact us to start your VA home loan journey — you’ll be in good hands with Fairway.