Veterans Affairs mortgages, more commonly known as VA loans, are available to most military, veterans, reservists, National Guard members and some surviving spouses. The U.S. Department of Veteran Affairs guarantees the loan which enables an approved lender (such as First Internet Bank) to provide more favorable terms. Since the program’s inception in 1944, approximately 22 million veterans have received VA loans (source: Chicago Tribune).
Advantages
VA loans offer competitive interest rates, usually lower than conventional mortgages. Recipients of the loan can purchase a home with no down payment, and no private mortgage insurance is required. Some lenders provide additional incentives. At First Internet Bank, VA loans are available without lending, origination, underwriting or processing fees. We also provide streamlined financing for veterans with an existing VA loan.
Eligibility and restrictions
Most military members will be eligible, but there are service eligibility requirements:
- 90 days of consecutive service during wartime (or less if discharged for a service connected disability) OR
- 181 days of consecutive service during peacetime (or less if discharged for a service connected disability)
- Reservists or National Guard members who did not see active duty must have six years of service
- Spouses of military who died during active duty or as a result of a service-related disability (who have not remarried)
- Those who were dishonorably discharged are no longer eligible
To verify eligibility to a lender, a Certificate of Eligibility is required and can be obtained online at https://www.ebenefits.va.gov/ebenefits/homepage.
While the VA does not require a minimum credit score to be part of this program, according to Bankrate.com most lenders, like First Internet Bank, will request a credit score of 620 or above. Recipients of this benefit must also use the loan for their primary residence. Limits on the loan amount vary by county. Investment properties and vacation homes do not qualify.
Fees
Although lenders may waive or reduce their standard fees, a Veterans Affairs fee applies to all loans. The amount of the fee depends on the down payment and classification as active duty, or a reservist or National Guard member. Fees are reduced with a down payment at 5%, and even greater at 10%. Please see the VA funding table for estimated funding fee rate. The fee is waived for those who receive disability compensation.
At First Internet Bank, we consider it an honor to serve the veterans who have bravely served our country. If you are interested in a VA loan, we’d love to help you. Call one of our experienced Loan Officers at 1-866-742-5158 with any questions or to begin your loan process today.
