There were around 20.4 million veterans in the U.S. in 2016, according to the most recent count by the Department of Veterans Affairs. If you’re one, then there could be various options available to you to help when you’re ready to buy and own a home.
Here are three things to know about VA loans — the type of home loan available to veterans, active duty service members, and surviving spouses of veterans.
1. VA home loans can potentially make it easier to buy a home.
The VA oversees programs to help service members, veterans, and eligible surviving spouses become homeowners, and the VA also provides a portion of a VA loan’s guarantee through mortgage lenders like Mr. Cooper.
A VA loan can have exclusive, veterans-only benefits, like comparatively low rates, waived requirements for monthly mortgage insurance payments, and sometimes even down payments as low as $0 for qualifying borrowers. Many states also offer special VA programs and benefits like property tax reductions, so check with your state VA office to learn about specific resources that you can utilize to help cover additional homeownership costs.
2. Veterans have special refinancing options available to them.
If you’re looking to refinance before a potential uptick in interest rates, you’ll want to start researching all of your options. If you already have a VA loan, you could be eligible for a VA Interest Rate Reduction Refinancing Loan (VA IRRRL) that doesn’t typically require income verification or a minimum credit score.
3. Veterans can potentially cash out 100% of their home equity without paying for PMI.
A cash-out refinance is something that all homeowners can look into if they have equity in their homes. Veterans have a unique cash-out refinance option available to them in most states —a VA 100 Cash-Out refinance. This type of refinancing enables homeowners to tap into up to 100% of their home equity, and get cash that can be used right away for things like home improvements and paying down debt. The VA 100 Cash-Out has another benefit: not having to carry private mortgage insurance (PMI). PMI is often associated with conventional loans and refinance options when borrowers make a down payment of less than 20% of the value of the home. However, VA Loans do include a funding fee*, so make sure you ask your mortgage lender questions about these details.
If you’re a veteran or in the military, make sure you know the loan options that best fit your needs. Get in touch with a Mr. Cooper pro to learn more about various options for VA home loans.
*VA loans require a funding fee unless eligible for funding fee exception. Call for details.