VA loans allow veterans, active duty military personnel, and other eligible borrowers to buy a home or refinance a mortgage on very advantageous terms.
Home buyers, for example, can buy with lower interest rates and zero down payment, all while avoiding mortgage insurance. VA loans also allow homeowners to refinance while taking cash out of equity at lower rates than they may otherwise be able to get.
Note that VA loans are not made by the Veterans Administration itself — rather, the VA guarantees part of the loan made by private lenders like Newfi. This guarantee allows Newfi to lend at lower interest rates and with easier credit terms.
Who is eligible for a VA loan?
US military active duty service members, veterans, national guard and reserve members, and surviving spouses are all potentially eligible for VA loans. (You can see all VA loan eligibility categories and criteria here.) Note that to qualify for a loan, borrowers must still have acceptable credit and income, as well as a valid Certificate of Eligibility, or COE. The type of COE you need depends on your eligibility category. The VA website explains what documents you need. You can apply for a COE at the VA eBenefits website, and we can also help you obtain an automated COE.
What are VA loan rates today?
VA mortgage rates vary depending on your credit and income, as well as the ups and downs of national mortgage rates. Rates can change every day, so it’s smart to find out what rate you qualify for today. Get your rate now
What are the advantages of VA loans over conventional loans?
- No down payment required
- Lower interest rates
- No monthly mortgage insurance premium
- More flexible credit terms
- Lower credit scores
- High maximum loan amounts
- No prepayment penalties
- Streamlined refinancing for current VA loans
- Refinancing OK for both VA and non-VA loans
- Funding fee can be completely rolled into loan itself
Note that there are caps on the amount of a loan that can be made without any down payment. Disabled veterans may have access to additional benefits. Talk to a Newfi loan advisor for details.
What are the disadvantages of a VA loan?
- VA loan borrowers must pay a one-time “funding fee” to the VA at closing, which can be paid in cash or rolled into the loan amount itself. The amount of this fee depends on your eligibility category (active duty vs. national guard, etc), the size of your down payment, and other factors. Disabled veterans may be able to waive this fee. To find out what fee applies to you, contact us or visit the VA website.
- VA loans are only for primary residences that are move-in ready. They are not suitable for investment properties, fixer-uppers, or vacation homes. (There are limited exceptions for second homes.)
- As with any mortgage, eligible borrowers must demonstrate sufficient credit and income to cover a VA loan.
How does a VA loan work?
After you establish your eligibility and meet VA loan requirements, you can choose either a fixed- or adjustable rate mortgage. (Newfi offers a wide variety of fixed rate and adjustable rate terms.) Note that civilian spouses can co-sign with eligible borrowers to help you qualify or obtain better terms. You can pay your mortgage at any time with no pre-payment penalties.
How does an VA loan compare to a conventional 30 year mortgage?
- A VA mortgage permits buyers to borrow with lower interest rates, no down payment, and easier credit requirements. However, a buyer will have to pay a one-time funding fee to the VA at closing, and the loan cannot be used for rental properties or vacation homes.
- A conventional mortgage may be advantageous in certain circumstances. If you plan to buy an investment property or second home, you may be required to use a conventional loan. And if you have a down payment of 20% or more, you may be able to avoid both the VA funding fee and mortgage insurance. Conventional loans, however, will have higher credit standards than VA loans.
Not sure whether you should use a VA or a conventional loan? Talk to a Newfi loan specialist and we’ll walk you through your options.
Why trust Newfi Lending with your VA loan?
Newfi is a direct lender, not a broker, so we can make lending decisions fast and at low interest rates. We’ve earned a five-star customer satisfaction rating from LendingTree for our low rates, fast processing, and excellent customer service. Give us a call at (888) 316-3934 and see just how friendly we are!
How can I get more information?
Talk to us at Newfi Lending. We’ll get you a personalized VA loan rate and review other mortgage options tailored to your situation.