A benefit to military life is the VA loan benefit. Why not like a 0% loan without mandatory private mortgage insurance? Bonus that they often offer lower rates than a conventional loan? If you qualify for this benefit, you should take advantage of it.
Meaning of the name: The VA does not provide home loans directly. The VA acts as collateral for the loan. This means that the VA guarantees to cover the bank’s losses in the event of default on the loan. This is additional security for lenders!
Are you eligible? Eligibility is based on service. Have you or your spouse served on active wartime duty for 90 consecutive days? Or serve on active duty in peacetime for 181 days? Or serve in the national guard or in the reserves for six years? Have you or your spouse been dismissed from your position under honorable conditions? Or are you the spouse of a military member who died in the line of duty or from a service-related injury or disability? If you can answer “yes” to one or more of these requirements, you should be eligible.
Prove that you are eligible. For the loan, you will need to obtain a Certificate of Eligibility (COE). To do this, fill out an application form for a certificate of eligibility (VA form 261880). Log on to ebenefits.va.gov with your CAC (Military ID) card to complete this form. This part of the process will ask you to create an eBenefits account if you don’t already have one, or to log in with existing credentials. Once on the site, click on the link entitled “Certificate of Eligibility for the Mortgage Loan” and follow the instructions. Be sure to print at least two copies of the COE – one for your own records and one for your mortgage lender. You can also request your COE by mail with the VA 26–1880 form. If you apply for a mortgage through a VA-approved provider, you should also be able to get your COE.
Questions or technical problems? You can contact VA/DoD at 1–800–983–0937. You can also ask your lender to help you obtain your COE. Most COEs are sent electronically.
Find a lender. Most lenders can offer VA loans. However, it is to your advantage to choose a lender who specializes in this. If you work with a real estate agent who regularly works with military families, they know and work with lenders with experience and expertise in the VA loan program. This means smoother browsing for you!
Put your other documents in order. Get a binder and gather the materials. Buying a home is not unlike moving or deploying, it’s best to keep everything in one place. You will need: If you are still on active duty, you will need a statement of service. A DD-214 will verify an honorable discharge. You will also need to demonstrate that you have sufficient stable income to cover your mortgage payment and monthly expenses. You must therefore ensure that you have your pay stubs or other proof of income at hand. Although individual lender requirements may vary, you will likely be required to produce bank statements, tax returns, W-2 forms, and orders (if you are PCSing). Your lender will provide you with any additional documentation needed.
Pro tip: put this information aside before packing your bags if you’re in the middle of a move.
Once you’ve obtained your Certificate of Eligibility, gathered your documentation, and assembled your dream team – an agent who’s professional in working with military families and a lender who’s comfortable with VA loans – you are ready to move forward with your home purchase. And in the process, you can reap the rewards of a hard-earned advantage.
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If you’re ready to move on or just want more information, the first step is to get no-obligation quotes.
This article originally appeared in the Millie Journal.
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