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VA Zero Down Home Loan

By B Wood
Apr 25th, 2013

zero down VA loansYou can buy a home with no down payment using a zero down VA home loan. This may sound too good to be true but it’s not. Those who have served in the United States military do qualify for benefits beyond their service pay. If you are currently serving in active duty, in the reserves, or retired this program can help you purchase a home now and take advantage of low mortgage interest rates.

To learn if you qualify and how the program works contact a VA approved lender. Not all mortgage lenders can issue VA loans so make sure you speak with someone that can.

VA Guarantee Service Requirements

1. Active Duty. This means being in active duty for 90 days during war time or 181 days in peace time and not dishonorably discharged.

2. Reservist. You need to have served for six plus years and not have been dishonorably discharged or deployed for more than 90 days in a combat zone.

3. National Guard. You need to have served for six or more years and not have been dishonorably discharged.

Once you meet the time in service requirement it is time to apply for a VA mortgage loan.

Zero Down VA Loan Process

1. Benefits. Obtain your benefits certification.

2. Apply. Contact a VA approved lender to formally apply for your home loan.

3. Income. They will review your income documentation to determine what loan amount you qualify for. Unlike traditional mortgage loans the VA also takes into consideration standard expenses associated with taking care of your family, like electricity bills and groceries. The goal is to make sure you purchase a home with a mortgage payment that your family can comfortably afford on a monthly basis.

4. Credit. Most lenders require you to have a 620 or higher credit score.

5. Job History. If you have been steadily employed for the past two years it can help you obtain a home loan. Those without steady job history may still qualify but will need to document current income.

6. Bankruptcy. If you have had a bankruptcy that is okay but you need to wait for seven years before applying for a VA home loan.

7. Appraisal. The VA will require an appraisal on the home you are purchasing to ensure that the home is worth the purchase price.

8. Approval. Once the lender has approved your home loan with the current VA mortgage guidelines they will start preparing closing documents.

It is important to remember that the VA does not directly issue home loans. They insure home loans through the VA guarantee. A standard bank or credit union will be your actual lender and the company taking your monthly payments. The VA will guarantee up to 25% of the balance of your home loan against default. That reduces the risk to the lender, allowing them to issue zero down home loans. If for some reason you ever default on your mortgage the VA will pay for 25% of the loan balance. Use your VA benefits to purchase a home now and take advantage of low mortgage interest rates.