Mortgage Market Downturn Improves VA Backed Loans' Popularity

VA backed home mortgages for military vets.

With the tightening of mortgage requirements in the post-subprime shake-up market, VA loans are increasing their usage by military for owner occupied residential home mortgages. Both active and retired military are able to secure lower interest fixed rate loans with little or no money down. Loan limits on the VA-backed loans are $417,000 in most areas of the US.

With the disappearance of many no-money-down mortgage packages, the VA loans are a way for young families in the military as well as retired vets to move in without a down payment. An additional benefit of the VA loans is that the VA waives the mortgage insurance on homes purchased without a 20% downpayment. VA guaranteed loans also do not allow the 3 - 4% closing and administration costs that normal loans charge.

The VA loans also allow for one of the few cash-out refinancing options available to vets with the necessary equity in your property and the loan-to-value amount meets the VA's lending standards.

For vets looking to utilize the VA's backing, submit VA form 26-1880 with your proof of military service to VA to obtain your Certificate of Eligibility. Next work with a lender to get a pre-approval to mortgage, pick out your house and sign a sale agreement. With the Certificate and Sale Agreement return to your lender to begin the process with the VA. The VA, like most goverment programs, is a longer process to get funding, but in the end, the benefits to vets and military personnel are well worth it. Your lender will know how to contact a VA approved appraiser and final steps to get your loan approved by the VA.