Different Types of VA Loans | by Rover Jones | There is no greater feeling than owning a home and not having to pay rent anymore. The only thing that makes many people shy away from owning their own home is the long loan application process and the high interest rates you have to pay after getting the loan. If you are a veteran, you know the hassle you go through to get a reasonable term loan. It is for this reason that VA loans were made.
They cater to any veteran who might want to take a loan but is afraid of the interest rates they will get. There are several of these loans, and all of them have different requirements. Learning about them will help you know what your options are and what you can do about them. Here are the different types of VA loans available.
Native American Direct Loan
Another type of VA loan is the Native American direct loan or NADL. It comes in handy for you when you want to buy or build a house that is on federal land. You can also use it to refinance an existing NADL to help reduce the interest rates. You can only qualify for this loan if you are a Native American veteran or a veteran married to a non-veteran who is Native American.
Your tribal government must also have an MOU with the federal government for you to be considered for this loan. You will have to provide proof of homeownership and show that you can pay the mortgage fees if you are successful. You also need to prove that you plan on living in the house you want to build or buy.
When getting a purchase loan, lenders can help you build to improve your home. It comes in handy for you, especially if you do not want to make a down payment. You can qualify for this loan if the sales price is not higher than the approved owner’s price.
The good thing about getting these loans is you do not need to have private mortgage insurance to qualify for the loan. If you pay the loan before time is up, you will not get any penalties or high interest on it. The one thing you will have to pay while taking this loan is the VA funding fee which is a one-time payment used to lower the cost of the loan you are taking.
IRRRL(Interest Rate-Reduction-Refinance Loan)
If you have a VA loan and would like to reduce its mortgage interest, then this is the best loan to take. An IRRRL will refinance your old loan with new terms that are simpler than what you had previously agreed to. You can only qualify for this loan if you already have an existing VA loan. It is also important that you provide evidence if you live or used to live in the home you took the loan for. Once you get the loan, ensure you make your repayments consistently and do so every month as you might end up losing the home altogether.
Cash-Out Refinance Loan
If you already have a long, even if it is not a VA one and would like to take another one to refinance it, then this would be the best option for you. You get to take a loan with different loan terms from the previous one, which might give you more time to pay your outstanding loan. To qualify, you need to provide a certificate of eligibility and meet the standards of credit.
You also need to be living in your home during the time you apply for refinancing. The cash-out loan can help you if you want to get some money to pay for other things like school or any other needs that you might have. It also enables you to refinance a non-VA loan into a VA loan.
Getting a VA loan is not as difficult as many people making it look. As long as you are qualified for the loan, then you can apply for it. If you are unsure of the requirements for the loan, talk to a financial advisor. They will go through the requirements with you and advise on what to do.