Taking advantage of your VA loan benefit is rather simple. First, you need to complete a Certificate of Eligibility (COE), a no nonsense form that ensures you meet the initial qualifications for the program. This form is available from VA-approved lenders and the VA website, and takes little time to complete.
The Department of Veterans Affairs may take several weeks to process your certificate whereas a VA-approved lender can get your COE processed in minutes. Using the Automated Certificate of Eligibility (ACE) system, lenders can get your COE online. Although the VA Home Loan program aims to abet all military personnel, not every service member qualifies. Military homebuyers who may qualify typically are in one of the three groups:
-Military members who served on active duty for 181 days during peacetime or 90 days during wartime.
-Members of the National Guard and Reserves who served for at least six years.
-Surviving spouses—who have not remarried—of a service member who died in the line of duty or because of a service-related injury.
Once you earn a VA loan, you’ll be entitled to its arsenal of benefits. Unlike conventional loans, VA loans in Massachusetts come with next-to-nothing down payments. Most VA loan borrowers pay nothing down, while the rest won’t be charged more than 5 percent down. Most of the time, military homebuyers say the tiny down payment is the program’s best perk.
Other advantages to the program save military homebuyers’ money in the long run, notably the negotiable interest rates. Since the VA backs up to 25 percent of each loan rather than issue them, VA-approved lenders lower the interest rates in return for assuming less risk. The program sweetens the deal for active-duty borrowers, who have interest rate caps.
Monthly savings further accrue because there is no private mortgage insurance in the VA Home Loan program. Also, closing costs are often lower than other loan types, and sellers may end up covering some of those costs.