VA loans continue to be among the best financing tools for Southern California home buyers. Far too few of those eligible take advantage of them. So who are VA mortgage loans for, what’s so great about them, and what do you need to get one?
What is a VA Loan?
A VA loan is a type of home mortgage loan backed by the Veterans Administration. VA loans are made by approved home loan lenders and banks, and are backed, or guaranteed by the government. This is similar to how FHA loans work, only with more advantages. This is one of the truly great VA Benefits designed for military veterans, their families, and select other individuals. The guarantee and design of this program reduces the actual lender’s risk and makes it easier for borrowers to get financing.
What is So Great About VA Loans?
The most prominent perk is that Southern California home buyers can still use these loans to achieve 100% financing or purchase homes with no down payment. Other features include lower credit score requirements, easier approvals and lower interest rates.
What Else Can Borrowers Use VA Mortgages For?
These real estate loans can be used to buy homes with no down payment. They can also be used to acquire lots, and build new homes. Qualifying homeowners can also use this financing program to refinance. This is possible through streamlined IRRRL refinances. These Interest Rate Reduction Refinance Loans enable borrowers to lower their housing payments with no credit check, no appraisal, and other perks meant to make the process easy. Loans can also be switched from ARMs (adjustable rate mortgages) to fixed rates, and terms can be shortened.
Other refinance capacities enable borrowers to get cash out of their home equity, and even get money to make energy efficient home improvements.
VA Jumbo Loans
In the past, some potential home buyers haven’t used their benefits, wrongly assuming they couldn’t get a large enough loan to buy the home they really wanted. However, while the normal loan limit cuts off at $417,000, high cost areas like Southern California enable borrowers to take advantage of jumbo loan limits. This varies by county, and changes each year though. In 2014, VA maximum guarantee limits for these California counties are $1M:
- Orange
- Sacramento
- San Francisco
- Riverside
- San Diego
- Los Angeles
More expensive homes can be bought, and the borrower can put down the difference as well.
Who are Veterans Administration Loans for?
The short answer is obviously ‘veterans.’ But this often leads many to pass up on their valuable benefits. VA loans are actually available to active service members, military veterans, spouses and widows of service members, veterans of special branches of the government, citizens who fought in allied forces during certain wars, cadets, merchant seamen and more.
While the qualifying period of service may be slightly different for each category and depending on when time was served, it is generally a minimum of 90 days active service. If you think there may even be a slim chance you might qualify for a VA home loan, it is definitely worth asking a mortgage professional.
Where to get a VA Loan
As mentioned above, these home mortgages are actually made by regular lenders and banking institutions. There are many in Southern California which offer access to them, though they may not always ask if you qualify – unless you ask.
