Posted 08/01/2014


VA Loans, Refinance Programs & Today’s Mortgage Rates

About the VA loan guaranty and qualifying for a VA loan

Dan Green

The Mortgage Reports Contributor

The VA home loan is a mortgage program available to active military members and veterans of the U.S. armed services. The program is offered by the Department of Veterans Affairs as part of the VA Benefits package, and has been helping veterans purchase and refinance homes for 70 years.

VA loans offer flexible mortgage guidelines at very low interest rates.

Click here to check VA mortgage rates today. (Jan 16th, 2018)

The VA Loan Guaranty

A VA loan is a mortgage guaranteed by the Department of Veterans Affairs. The VA loan program was started in 1944 as a way to help returning veterans buy homes and build roots into a community.

VA loans can be used to buy a home, build a home, refinance a home, or simultaneously purchase and repair a home.

So long as a lender ensures that a loan meets the agency's eligibility standards for veterans, the VA will issue its "VA Guaranty", a promise to reimburse lenders up to 25% of the loan amount should the borrower stop making payments and cause a foreclosure.

VA mortgage rates are often low when compared to FHA loans and conventional loans because the VA guaranty's 25% loss coverage means that a bank's risk in foreclosure is virtually nil. The VA guaranty reduces bank risk in a similar way that a 25% downpayment would.

Click here for today's VA mortgage rates (Jan 16th, 2018).

The Benefits Of A VA Loan

The VA loan is a flexible, powerful mortgage program for veterans and active servicemembers. In addition to providing access to 100%, no-money-down mortgages, the VA loan can be used to purchase homes, to refinance homes, or to repair them.

Furthermore, no matter how big or how small your downpayment, the VA will never charge mortgage insurance premiums (MIP) to its veterans. VA loans are mortgage insurance-free, always.

Another benefit of VA loans is that they are assumable. This means that when your home is sold, the buyer of your home can "take over" your mortgage, current mortgage rate and all.

Assumable loans can increase the value of your home in a rising mortgage rate environment.

Lastly, all VA-backed homeowners get access to the VA Streamline Refinance program, arguably the fastest and best refinance program available. The VA Streamline Refinance, which is formally known as the VA Interest Rate Reduction Refinance Loan (IRRRL), requires no appraisal, no verification of income, and no official credit check.

When mortgage rates are dropping, the VA Streamline Refinance is a fast and effective way to save money each month.

The VA Loan's Two Key Rules

In order to qualify for a VA home loan, the Department of Veterans Affairs enforces two key rules.

First, the home buyer or refinancing homeowner must meet the VA's minimum military service requirements. Minimum service requirements range from 90 days for veterans who served during period of war; to 181 days for veterans who served during times of peace.

Complete VA service requirements are listed here.

The second key rule is that military borrowers must be eligible to use their VA benefits for the purposes of a purchase or refinance.

In order to provide eligibility for benefits, borrowers are required to show a Certificate of Eligibility (COE). The COE will state whether a veteran or servicemember is eligible for a VA home loan based on service history, and will also provide details to the lender including:

  • Whether the veteran has full VA home loan entitlement
  • Whether the veteran is exempt from paying certain VA loan fees
  • Whether the veteran has prior, outstanding VA loans and their current status

It can be faster for a mortgage lender to procure a Certificate of Eligibility than for a veteran -- COEs can be requested and delivered in just minutes via a VA website with your permission.

Check today's VA rates and request your COE here. (Jan 16th, 2018)

Get Today's VA Mortgage Rates

Current mortgage rates are near a 12-month low. VA-eligible buyers are benefitting from extended home purchasing power and lightning-fast approval times.

Compare today's live VA mortgage rates now. Rates are available online at no cost, with no obligation to proceed, and with no social security number required to get started.

Click to get a mortgage rate quote now (Jan 16th, 2018).

Dan Green

The Mortgage Reports Contributor

Dan Green is an expert on topics of money. He has been featured in The Washington Post, MarketWatch, Bloomberg, and others.

The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.

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2018 Conforming, FHA, & VA Loan Limits

Mortgage loan limits for every U.S. county, as published by Fannie Mae & Freddie Mac, the Federal Housing Administration (FHA), and the Department of Veterans Affairs (VA)