VA Loans
A VA loan can help well-qualified veterans and their spouses buy a home with no-down-payment required.
VA Loan Candidates
Many veterans and spouses can qualify for a VA loan. Typically, most veterans from an array of different service areas and who served for a certain period of time or longer can qualify for a VA loan. These are typically affordable loans that enable veterans to purchase a home with flexible borrowing options. Explore the benefits of VA loans below.
How Does A VA Loan Work?
One great advantage of a VA loan is that they are ensured, or guaranteed, by Veterans Affairs. VA loans comprise of several different types of loans, and can include fixed rate mortgages and adjustable rate mortgages, as well as other loan options.
VA Loan Qualifications
- A Certificate of Eligibility from Veterans Affairs, which means that you are eligible for a VA loan. Eligibility depends on your exact service type as well as how many years you served. The Safeway Lending team can help you apply for this document if you do not already have one.
- A credit score of at least 620.
- A debt-to-income ratio (DTI) of no more than 60%. Estimate your DTI by summing monthly payments made towards debts (such as credit card and car payments) and then divide the total by your monthly pre-tax income.
- A funding fee charged by the VA, which some veterans may not have to provide if they are disabled, or already receiving disability through the VA.
VA Mortgage Rates
| Product | Rate | APR |
|---|---|---|
| VA 30 Year Fixed | 2.875% | 3.307% |
| VA 25 Year Fixed | 2.875% | 3.392% |
| VA 15 Year Fixed | 2.49% | 3.274% |
30-year Fixed-Rate VA Loan:
An interest rate of 2.875% (3.307% APR) is for a cost of 2.00 Point(s) ($4,092.02) paid at closing. On a $204,601 mortgage, you would make monthly payments of $848.88. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater. Payment assumes a loan-to-value (LTV) of 76.63%. VA loans do not require PMI. The VA loan is a benefit of military service and only offered to veterans, surviving spouses and active duty military.
25-year Fixed-Rate VA Loan:
An interest rate of 2.875% (3.392% APR) is for a cost of 2.125 Point(s) ($4,347.77) paid at closing. On a $204,601 mortgage, you would make monthly payments of $957.00. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater. Payment assumes a loan-to-value (LTV) of 76.63%. VA loans do not require PMI. The VA loan is a benefit of military service and only offered to veterans, surviving spouses and active duty military.
15-year Fixed-Rate VA Loan:
An interest rate of 2.49% (3.274% APR) is for a cost of 2.00 Point(s) ($4,092.02) paid at closing. On a $204,601 mortgage, you would make monthly payments of $1,363.30. Monthly payment does not include taxes and insurance premiums. The actual payment amount will be greater. Payment assumes a loan-to-value (LTV) of 76.63%. VA loans do not require PMI. The VA loan is a benefit of military service and only offered to veterans, surviving spouses and active duty military.
Advantages of a VA Loan
- Some veterans can obtain a VA loan with no down payment.
- Lower credit score requirements.
- Mortgage insruance is not required.
- You can get a VA loan more than once.
Refinancing through a VA also offers some fantastic advantages:
- Refinance up to 100% of your home's value and receive cash if you already have obtained a VA loan.
- You can potentially refinance up to 120% of your home's value if you already have obtained a VA loan and do not want to take cash out.
Mortgage Insurance Requirements
For borrowers making smaller down payments, primary mortgage insurance (PMI) may be required. This threshold is a downpayment of 20% of your home’s value.
- PMI payments range between 0.5% and 1% of your loan annually, distributed over 12 payments.
- Once you reach 20% equity in your home, you may be able to request to cancel PMI.
- PMI is often cancelled automatically once you reach 22% equity.
- Many VA loan recipients do not need to pay PMI
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