The United States Department of Veterans Affairs (VA) has many different kinds of programs to help people in different situations. How does a VA loan work? This is a very important question, especially for people who do not understand the process of how to qualify for and use a VA loan. Parents on active duty have an incredible amount of responsibility: kids, duty, and building for themselves. A VA loan can help in these endeavors. Here is how you can make a VA loan work for you.
How does an active duty parent qualify for a VA loan?
As of August 2, 1990, active duty military must complete at least 90 days of active duty in order to be eligible for a VA loan. The 24 months of continuous service requirement applies to military that is not active as well as active.
Are active duty salespeople eligible for this loan?
Active duty salespeople are also eligible for a VA loan after the same 90 day period of continuous active duty service.
What about spouses of active duty parents?
If an active duty parent has been listed as missing in action (MIA) or as a prisoner of war (POW) for at least 90 days, then the spouse is eligible for active duty benefits. If the active duty spouse died while on active duty, then the spouse will become eligible as well as long as he or she has not remarried. Finally, if the active duty parent was completely disabled or died as a result of a disability that occurred because of military service, then the surviving spouse and parent may also qualify for a loan from the VA.
If the spouse of an active duty person has remarried, that spouse is not automatically removed from eligibility, but there are some additional considerations. The spouse may be required to consult with a VA approved lender along with other requirements. If the spouse of an active duty parent married someone else before December 16, 2003, the VA will be required to reject the VA application if it comes after December 15, 2004.
Do the benefits of a VA loan pass down to the children of active duty parents?
Unfortunately, even active duty parents cannot pass down the ability to qualify for a VA loan down to children.
What are the benefits of a VA loan to active duty parents?
VA loans provide a wide array of benefits to help compensate active duty parents for their service to the country. First of all, the requirement for a large down payment is waived. In some cases, VA loans can be put forward for active duty military with no down payment at all. The second benefit of VA loans to active duty military parents is the waiver of the private mortgage insurance (PMI) payment, a payment that usually occurs when a borrower is coming to a lender with less than 20 percent of the total home price as a down payment. The PMI can add anywhere from one to three percent to the total price of a loan, a number that comes out to tens of thousands of dollars over the life of the loan and adds nothing to the equity of the owners when it is paid.
Mortgage rates are typically very low for people who are eligible for VA loans. Because the loans are backed by a government organization, the risk profile of the borrower is much lower in the eyes of lenders. Even if an active duty parent does not have the best credit score or financial history, lenders will look at his or her profile as though these problems are much less important. This is a huge advantage to parents on active duty who may have experienced financial hardships in the past. This benefit can save parents hundreds of thousands of dollars over the life of a VA loan.
Active duty military may also be eligible for other advantageous terms depending on the lender. Check with the individual lender who is actually providing the funds for the home purchase, and be sure to make those lenders compete for your business. Banks are very eager to do business with the government, so you are always in the driver’s seat if you are an active duty parent with a VA loan eligibility.
Where are active duty VA loan programs available?
There are active duty VA loan programs available in all 50 states with multiple lenders in each state. Although there are other kinds of military personnel who are eligible for VA loans, active duty military parents will usually receive priority when it comes to getting the best mortgage rates, the best terms, and the best timing on finding properties. Do not hesitate to get in contact with the VA so that you can start receiving your benefits as soon as possible.
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Finally, if the active duty parent was completely disabled or died as a result of a disability that occurred because of military service, then the surviving spouse and parent may also qualify for a loan from the VA.
The second benefit of VA loans to active duty military parents is the waiver of the private mortgage insurance (PMI) payment, a payment that usually occurs when a borrower is coming to a lender with less than 20 percent of the total home price as a down payment.
