Buying a home in Bozeman as a current or former member of the military is easier than you think. The VA loan program is designed specifically to help you obtain your goal of home ownership.
What is a VA Loan?
The VA loan program was created by the United States Government to help returning service members buy a home. VA loans help active duty military members, veterans, and their families purchase or refinance their homes.
Benefits of a VA Loan
A VA loan has a lot of benefits versus other types of mortgages. The three big distinctions of the VA loan are 0% down payment, no mortgage insurance, and really good rates.
0% Down Payment
With a VA loan you do not need to come up with a big down payment. Other loans require down payment. The FHA loan requires 3.5%. Other loans require 5% or more. The VA loan, on the other hand, lets you keep your money to use how you want. You can still apply money toward a down payment if you choose.
Private Mortgage Insurance
Private Mortgage Insurance or PMI is often required on a loan when you don’t have at least 20% equity in the home. PMI is very common in several different loan types and adds money toward your monthly payment. PMI protects the lender from losing money if the borrower ends up in foreclosure. Mortgage insurance can be around .3% to 1.5% based on credit scores, down payment, etc. Depending on the loan type, PMI could stay on the loan for the entire term of the loan. The VA loan, however, does not require mortgage insurance, even with 0% in down payment. This frees up a portion of your monthly payment and helps you qualify for a greater amount.
Really Good Rates
VA loans are backed by the federal government which allows lenders to offer very competitive rates. Your individual rate will vary based on your individual qualifications. While rates, will vary, often times they will be better than other mortgage programs.
The VA funding fee goes to the VA in order to keep the program going. The funding fee will vary from barrower to barrower depending on their circumstances. For your first time using a VA loan, the funding fee will typically be 2.15% of the purchase price. For subsequent loans, it will typically be 3.3%. Veterans with service related disabilities may be exempt from the funding fee.
The funding fee can be rolled into the loan which will keep you from having to come up with this amount of money at the time of closing.
Who Qualifies For a VA Loan?
The VA loan program extends to veterans, active duty service members, National Guard members, and reservists. The surviving spouse of an military member who dies while on active duty or as a result of a service-connected disability may also qualify.
You must also meet at least one of the following criteria:
- You have served 90 consecutive days of active service during wartime.
- You have served 181 days of active service during peacetime.
- You have more than 6 years of service in the National Guard or Reserves.
Unlike other loan programs, the VA loan does not have any minimum or maximum income requirements outside of being able to afford the loan.
Most VA lenders use a benchmark of a 620 credit score in order to qualify for VA financing. While this is a common benchmark, it can vary from lender to lender.
In most parts of the country a barrower can get a VA loan of up to $453,100. If the purchase price of he home exceeds this amount, you will need to bring a down payment to meet the difference. In some higher priced counties, the VA has increased this limit. As of 2018 the VA loan limit for Gallatin county is the standard $453,100.
If you are interested in purchasing a home with a VA loan, it is important to work with a good lender & Real Estate Agent in order to have the highest rate of success. Please reach out to me to begin the process.
For more information please visit https://www.veteransunited.com/