VA loans (Department of Veterans Affairs loans) are issued by private lenders, such as a mortgage company or bank, and guaranteed by the U.S. To be eligible for a VA loan in Michigan, you or your spouse must meet the requirements set by the VA. A VA mortgage loan (also known as a Department of Veterans Affairs home loan) is one of the most useful military benefits. Such loans are provided to help consumers buy, build, repair, retain, or adapt a home for owner occupancy.
VA loans are provided only once. If a former soldier is already paying off a home loan, you will not be able to use the additional benefits.
The main advantages of VA loans
- Quite low interest rate on the loan;
- Small initial payment;
- A mortgage can be issued for an apartment in a new building or a building under construction.
If a veteran wants to get help in obtaining a mortgage, he needs to collect all the necessary documentation in advance. To take advantage of the benefits and favorable terms of lending, it is enough to provide a basic set of documents confirming the status of a veteran. This includes:
- beneficiary’s passport;
- certificate of income;
- information about the guarantor for the mortgage loan;
- certificate of a participant in hostilities;
- military ID;
- if the borrower is disabled, a doctor’s opinion is required.
To be approved for VA loans, veterans must prove their poor living conditions. The following certificates and documents can serve as evidence:
- proof that you don’t have your own housing;
- documents confirming cohabitation with other citizens;
- a document on residence in a hostel or communal apartment;
- certificate of living in emergency conditions;
- a document confirming the absence of electricity, gas and other utilities in the house.
If a citizen has at least one document from the above list, it is highly likely that the bank will provide a VA loan on preferential terms.
How to get a VA loan?
The process of obtaining a VA loan consists of several successive stages. This procedure must be taken with full responsibility. You can use the following step-by-step plan.
- The first step is to visit the banking organization you use most often. Ask your consultant if the bank provides mortgage benefits to veterans;
- If you are completely satisfied with the loan conditions, you must fill out and submit an application form. The bank examines this document and checks whether the borrower is suitable for the terms of preferential lending;
- To confirm the information specified in the application, you need to provide the bank with a package of necessary documents. After consideration, the lender makes a final decision;
- At the last stage, the borrower gets acquainted with the bank’s decision.
Each borrower should be prepared for the fact that the bank may refuse to provide a VA loan. This can happen if professionals decide that a disabled person will not be able to make monthly payments.
Another reason for refusing a VA loan may be the provision of inaccurate information. In this case, the credibility of the borrower will be lost, and it will become almost impossible to get a mortgage.
Veterans can count on benefits when buying a home with a mortgage. It is only necessary to carefully read the terms of the mortgage program and collect the necessary documents.