Dedicating one’s life to serving your country is one of the most noble commitments a US citizen can make. And while this life can be dangerous, actively participating in the US armed forces can be met with numerous rewards. One way the Department of Veteran Affairs thanks its veterans and active service members is through a Veteran Administration Loan.
VA loans offer veterans interest rates and financial benefits unmatched in the market. Sure, there may be some more hoops to jump through, but our company Bozeman Real Estate Group will guide you every step of the way to ensure our active military personnel and veterans receive the lowest rates available for their homes in Montana.
A VA loan is a mortgage insured by the US Department of Veteran Affairs and issued by private lenders like banks or credit unions. They can only be obtained by veterans, active-duty service members, and qualified spouses.
It is estimated that less than 12% of veterans and active military personnel utilize their VA loans. A little-known fact is that any veteran, no matter their age or the number of times they have qualified for a VA loan, is still eligible for a VA loan. Whether it’s been 1, 15, or 60 years since you served, you still qualify as long as you’re borrowing for your primary residence.
Condominiums are somewhat of a gray area when it comes to VA loans. As condos differ from buying a multi-unit property or single-family residence, the VA has to approve the specific condo in order for a veteran or military service person to purchase a unit. To see if you qualify, you must first obtain your DD Form 214. A qualified VA lender then requests your VA Certificate of Eligibility for you, or you can request it directly from the VA’s eBenefits website.
There are numerous advantages to utilizing a VA loan to buy your property. Some of the primary benefits include not having to deal with private mortgage insurance (PMI), as well as low-interest rates and closing costs. PMI alone adds anywhere between 0.5% to 1.0% to the monthly cost of your home. Let’s say you owe $200,000 on your mortgage. Your yearly PMI would then cost upwards of $1000 to $2000 in a year. But with a VA loan, this cost is completely waived.
Another major benefit to VA loans is your down payment – or lack thereof. Homebuyers are encouraged to put 20% or more of the total home value towards a down payment. But this is not needed for veterans and active military persons with a VA loan.
However, while military personnel can take advantage of the above benefits, putting as much money down as possible is still strongly suggested. The more money you can put down, the faster you’ll be able to pay off your house. And it’s important to know how much house you can afford to develop a feasible working budget for you and your family.
Another important thing to note is that changes to the Blue Water Navy Vietnam Veterans Act now allow for VA-home loans to not be limited to the FHFA Conforming Loans Limits. Meaning, Veterans are now able to obtain home loans in all areas, regardless of the amount. These changes allow Veterans living in expensive housing markets to still use their benefits to purchase a home.
Here are 7 tips to consider if you’re thinking of buying a home in the Bozeman area with a VA loan.
A COE is issued by the U.S. Department of Veteran Affairs and is proof that you are eligible for the VA home loan benefit.
Lenders tend to be more flexible with VA loans.
You are still responsible for certain closing costs (i.e., application fees, insurance, inspection fees, real estate taxes, and more).
Look for reputable lenders that cater to military members, veterans, military spouses, and their families - compare all offers.
If you are looking for a Bozeman area real estate agent that specializes in VA loans, look for one that has the MRP (Military Relocation Professional) designation. You can use the Agent Match feature on our website to see agents that have this designation.
Properties purchased through a VA loan cannot be used as vacation homes or investment properties, and condos must meet certain requirements.
Interested homebuyers must complete the VA’s minimum occupancy requirement.
While the federal government insures all VA loans, they do not actually loan you the money for your future house. Applying for a VA loan still requires working with a bank or mortgage institution. And as with all government loan programs, there’s always a little more paperwork.
Fortunately, here at Bozeman Real Estate Group we can guide you through this process without issue and has a list of preferred lenders who have proven reliable for Gallatin County military veterans and active service members. Together, we can find the proper licensed VA mortgage lender to ensure we find the right house for you. Click here to contact us.
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