What You Need to Know Before Applying For a VA Home Loan

When deciding to apply for a VA home loan, you are in essence, applying for another type of loan. Although VA home loans are not the same as conventional loans, there are things that you should be aware of when going about it.

You must be aware of the differences between a VA home loan and a conventional mortgage. These are the main areas that you will need to pay attention to when applying for a home loan with VA.

First of all, you must be aware that if you have no credit history or a bad credit history with your credit report you may not qualify for a VA home loan. While you can still get a conventional loan for a VA home loan you may have to pay a higher interest rate than a conventional loan. Some lenders will go as far as to even charge a higher interest rate if you have bad credit.

Since this is an application for a home loan, you may be required to furnish proof of income and assets. All loans require some form of income verification. Your lender will run their income verification of you to see if you are eligible for a VA home loan.

Your assets will be verified by your lender in addition to your income and expenses to see if you are qualified for a VA home loan. Your assets will include your vehicle, retirement account, other personal property, and other items that are considered to be valuable to you. Your lender will be careful to verify what you own.

There is no credit check that the lender will perform on you for your VA home loan. If you have bad credit or a history of bankruptcy your lender will still make you an offer for a VA home loan but they will take it from a much lower value, therefore a larger interest rate, than they would have if you had no credit history.

Although your home loan will be set up with a fixed rate, you will receive more of a discount for the fixed rate as well as monthly payments. The fixed rate does not change month-to-month like the adjustable rate. The lender will allow you to take a longer term with the variable rate, but they will be much more expensive in the long run.

The interest rate on your VA home loan will remain the same for the life of the loan. This means you will be paying a higher interest rate for the life of the loan if you decide to pay it off early. If you pay off your home loan early you will save money on interest.

The interest rate on a VA home loan will vary from lender to lender. The bank will have a set rate and no one else will have any influence over the rate. The lender you choose to apply for your home loan will determine how much you pay in interest throughout the life of the loan.

Your VA home loan will not provide you with any form of repayment assistance. If you are unable to pay your payments, you will be given the option to apply for an assistance program through your lender.

There is no assistance plan that your lender will provide for you to use in conjunction with your VA home loan. These types of programs are not provided to individuals who do not qualify.

To get the best deal possible for your home loan it is best to ask questions of your lender. There may be other programs available to you that the lender was not aware of when they approved your application.