The VA partially guarantees VA loans, and they are designed to be simple and flexible for veteran and military families. Many veterans who would otherwise be unable to finance a home are given the opportunity thanks to VA entitlement. So just what are the benefits of VA loans and who can take advantage of them?
What are the Benefits of a VA Loan
- Down payments can be colossal, from $7,500 all the way to $90,000, depending on the loan amount and the percentage down. But VA purchase loans require no down payment.
- Because VA loans are backed by the federal government, no private mortgage insurance is required. This could save you a few hundred dollars every month.
- The government guarantee on VA loans also helps decrease risk for banks and lenders, so interest rates for VA loans are generally lower than they are for conventional loans.
- The VA will allow lenders to count your Basic Allowance for Housing (BAH) as income, so you can use it to help pay your mortgage.
- Conventional loans that are paid off or refinanced early are usually hit with a pre-payment penalty if the loan hasn’t fully matured. But VA loans accrue no prepayment penalties, so you can refinance or prepay your mortgage anytime you like.
- While other VA lenders may have minimum credit score requirements, at Low VA Rates, we follow the VA handbook, meaning we disqualify no one from taking out a VA loan based on credit score alone.
- The VA Streamline Refinance, a.k.a. the Interest Rate Reduction Refinance Loan (IRRRL), allows borrowers to refinance to a lower interest rate without having to re-apply or re-qualify for the VA loan program.
- Closing costs, such as the VA funding fee, can be financed into the loan itself or waived if the borrower has a service-related disability. Additionally, the VA has put limits on how much you can be charged in closing costs.
Who Is Eligible for VA Loan Benefits?
Military veterans with sufficient income, acceptable credit histories, and a Certificate of Eligibility qualify for VA benefits. As a veteran, you must also have been discharged from service under circumstances other than dishonorable. But what do we mean when we say “veteran”? The VA’s website will tell you specifically how many days you’ll need to have served to be eligible for VA benefits. For example, veterans of the Vietnam War must have served in active duty for a total of 90 days.
You may also qualify to receive VA benefits if you are:
- an officer of Public Health Services or of the National Oceanic and Atmosphere Administration
- a cadet at the Military, Air Force, or Coast Guard academies
- a midshipman of the Naval Academy
- a merchant seaman who served during World War II.
Military Spouse Benefits
What benefits do military spouses get? Spouses of veterans are also entitled to certain VA benefits. Some of these include:
- The Dependency and Indemnity Compensation (DIC), which is a monthly payment made to surviving spouses of deceased veterans or service members. On average, the DIC is approximately $1,200 with a $300 allowance, but it can be increased if the deceased left behind dependents (including parents) or if the surviving spouse needs further help.
- Spouses and dependents will receive a Survivor’s Pension if they meet certain income and net worth requirements.
- Educational costs are also mitigated by the VA for surviving spouses and dependents. Various VA programs like VA Survivors’ and Dependents’ Educational Assistance will help cover the cost of books, tuition, or housing for university attendance or the pursuit of other degrees. Job training, career counseling, and even apprenticeships are also available through these programs.
- Surviving spouses can also enroll in benefits coaching. This helps them understand what is available to them and how they can take advantage of everything to which they’re entitled.
- Several VA healthcare programs, such as the Civilian Health and Medical, Caregivers, the Foreign Medical, or the Children of Women Vietnam Veterans, offer affordable healthcare to spouses and children of veterans.
- Surviving spouses can apply for VA Purchase, Cash-Out, or Streamline Refinance loans.
- VA life insurance policies come with death benefits that are tax-free and can be used however the spouse wishes. In addition, the free VA Beneficiary Financial Counseling Services is available to surviving spouses enrolled in TSGLI, VGLI, FSGLI, or SGLI spousal coverage.
- Aid and Attendance is a pension benefit that helps those spouses or dependents needing in-home care or who live in nursing facilities.
For more information on Military spousal benefits, visit this link.
Who Is Eligible for VA Spousal Benefits?
Surviving spouses can apply for a VA home loan if:
- Their spouse died while serving or due to health problems resulting from a service-related disability
- Their spouse is a POW or is MIA
- Their spouse was totally disabled
Dependency and Indemnity Compensation is available to survivors if:
- The veteran died while in active duty or inactive duty training
- The veteran died due to a service-related injury
- The veteran was entitled to receive VA compensation for service-related disabilities
Survivor’s Pension is awarded to spouses if the veteran:
- Served at least 90 days in active duty if service was before September 7, 1980
- Served at least 24 months in active duty if service was after September 7, 1980 (for both options, one of these days must have been during wartime)
To qualify for the Survivor’s Pension, the family’s yearly income must also be less than the amount specified by Congress. For more information, visit this link. For complete DIC eligibility requirements, visit this link.
Taking Care of Military Families
Our business at Low VA Rates is being mindful of military families, especially surviving spouses or dependents. We know the sacrifice you make and want to help all military families rebuild their lives after tragedy strikes. Give us a call at 866-569-8272, and we’ll take the time to educate you on all your VA loan benefits.