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How to Maximize Your VA Loan Benefits

Our active military and veterans have worked hard and sacrificed for their country. One of the small ways we can repay them is to ensure they have access to affordable housing that is also a good investment. That’s why the VA loan is designed to be such an incredible benefit.

However, not all veterans are reaping the full benefits of their VA loan. Here are some of the top ways to make the most of yours:

1. Check your eligibility.

First, make sure you’re eligible for a VA loan before you even begin searching for a home.

To qualify for a VA loan, you must:

  • Be a U.S. veteran who served on active duty after September 15, 1940. Veterans must have been discharged under conditions other than dishonorable after the required length of time corresponding to their enlistment year.
  • Be a current or former member of the Selected Reserve or National Guard.
  • Be an eligible surviving spouse of a veteran who died while in U.S. military service or from a service-connected disability, or who is MIA or a POW.
  • Be a service member of certain related organizations, such as cadets of the U.S. Military, Air Force, or Coast Guard Academy.

You also must have satisfactory credit, sufficient income, and a valid Certificate of Eligibility. Finally, the home you’re buying must be your primary residence, not a vacation home or rental property.

2. Understand the advantages of the VA loan.

To make the most of your VA loan, it can be helpful to fully understand its intended benefits. That way, you can ensure that your loan officer and lender are keeping your best interests in mind.

VA loan benefits include:

  • No money down: This means you can purchase a home without a deposit. Plus, if you don’t use your full $36,000 VA loan entitlement the first time you buy a home, you can get another VA loan on a new property and use the rest of your entitlement.
  • 100% Financing to $1,000,000: This has a lot of uses.  100% financing can still be used with your VA loan even past the maximum loan limits in most counties. Even if you’ve used your VA loan already, in many cases you can still get 100% financing!
  • No private mortgage insurance (PMI): VA loans are guaranteed by the

Government, so lenders do not require the borrower to purchase private mortgage insurance. Simply put, this lowers your payments significantly.

  • Lower interest rates: VA loan interest rates are typically much lower than those of conventional loans. This is especially true when the borrower has a low credit score, because the VA doesn’t raise the interest rates of veterans with less than perfect credit.
  • VA loans are assumable: When you sell your home, the new owner can assume your VA loan, which will make it more attractive to potential buyers.
  • VA loans have more flexible underwriting standards: Because lenders know your loan is guaranteed, they’re more likely to approve your loan even if you have poor credit or carry debt.

3. Know these VA loan myths and tips.

Despite what you hear, don’t believe these common myths about the VA loan:

  • They take longer to close.
  • The seller has to pay extra closing costs.
  • You can’t use a VA loan if you’ve had a bankruptcy or short sale.
  • You can’t use it to buy a home with a non-spouse partner.
  • VA appraisers are more strict.
  • You can’t use your VA loan to fund renovations for a fixer-upper.

All of these myths are simply not true, and a knowledgeable lender will help you navigate around them.

Next, take advantage of these tricks when using your VA benefit:

  • Get a second VA loan: Despite what some lenders say, you can get another VA loan with 100 percent financing, even when your VA loan is already tied up.
  • If purchasing a condo, be sure it is VA-approved: Condo financing works a lot differently than home financing, so make sure the property you’re purchasing is on the VA-approved list for condos.

4. Consider refinancing with a VA loan.

VA loans are also beneficial when refinancing. They’re very easy to refinance, so you can take advantage of falling interest rates or gain access to cash when needed. But remember: As a new homeowner, you can’t refinance until you’ve made at least six mortgage payments.

5. Use all of your VA benefits.

Don’t listen to lenders who say you can only use your VA entitlement once. Until you use up the entire benefit, you can use and reuse the VA loan multiple times.

Get a Full VA Loan Analysis

As you can see, making the most of your VA benefits can be a complex process. But using the loan to its full potential can save you thousands of dollars. That’s why it’s important to work with a mortgage lender that is well-versed in VA loans—one that will help you accurately break down the numbers for your situation and expertly review your case to help you save money.