VA Loans
What Are VA Loans?
The Servicemen’s Readjustment Act was passed by Congress in 1944 to provide a number of different benefits to veterans and their surviving spouses. One of the key benefits of this act was the VA loan. The VA loan was designed to help American veterans purchase a home when alternative financing was not available or difficult to obtain. The U.S. Department of Veterans Affairs (VA) guarantees these loans and offers 100% financing, making qualification easier for veterans. TheFloridaMortgageCenter.com is proud to offer VA financing to the many veterans living in Palm Coast, Flagler Beach, Jacksonville, Daytona Beach, and St. Augustine, Florida.
Most veterans, military (including National Guard), and spouses of deceased military members are eligible to apply for a VA loan. Before any of these individuals can apply for a VA loan, a Certificate of Eligibility (COE) will need to be acquired. A few credit and income requirements will also need to be met in order to qualify for the loan. Veterans will find there are many advantages of a VA loan when compared to other popular mortgage options.
Palm Coast VA Loan Benefits
- No down payment (appraised value cannot exceed sale price)
- No private mortgage insurance (PMI) premium required
- No pre-payment penalty
- Closing costs are limited by VA regulation and may be paid by the seller
- VA funding fees (up to 3.3%) can be financed with the loan
- Up to $625,000 loan amount (certain counties may be higher)
Florida VA Loan Limits 2021
| County | Single-Family | Duplex | Triplex | Fourplex |
|---|---|---|---|---|
| Flagler | $625,000 | $800,250 | $967,250 | $1,202,000 |
| St. Johns | $625,000 | $800,250 | $967,250 | $1,202,000 |
What really changed with VA loan limits?
Veterans and active-duty service members have always been able to use VA home loans to buy homes over the $548,250 loan limit. These “jumbo VA loans” had different rules, however — they required a down payment of 25% of the difference between the purchase price and the relevant loan limit.
For example, if you wanted to purchase a home for $584,350 in a county where the loan limit was $484,350, then you’d be borrowing $100,000 more than the cap. You’d be responsible for 25% of that difference as a down payment. That’s $25,000.
But now that the new law’s provisions are implemented, these “jumbo loans” don’t carry the same down payment requirement from the VA. In theory, a homebuyer who meets the eligibility, income, and credit requirements can get a million-dollar home with zero money down, for example.
This likely means that the new rules benefit only a small proportion of Veterans and fewer of those who are still serving. A $750,000 home loan with zero down payment and 3.4% interest rate has an estimated monthly mortgage payment of $4,100, that’s a lot more than the average homebuyer can afford.
An exception to the new VA loan limit rules
The only exception to the new “no cap” rule applies if you have “diminished VA loan entitlement.” That can arise if you’ve previously defaulted on a VA loan or if you’re already using some of your entitlement on another home loan. For these borrowers, qualifying for a zero down payment loan will still be based on established county loan limits, plus their remaining entitlement.
VA Loan Cash Out Refinance
VA loans are available not only for the purchase of a new home but for refinances as well. Those with existing VA loans can take advantage of a Cash Out Refinance Loan or Interest Rate Reduction Refinance loan depending on their individual needs.
- Purchase Loans – Provides veterans with competitive terms, rates, and down payment options on mortgages for the purchase of a new home.
- Cash Out Refinance Loans – Veterans with equity in their homes can use a cash-out refinance loan to cash for various expenses such as home improvements, or management of other debts.
- Interest Rate Reduction Refinance Loan (IRRRL) – Existing VA loans can be refinanced at a lower rate through an IRRRL. This is also referred to as a VA Streamline Refinance Loan.
Whether you are a veteran looking to purchase your very first home, or an existing VA loan holder looking for a better interest rate, our team of VA loan experts at TheFloridaMortgageCenter.com can help you. For more information on VA loans or to begin the qualification process, contact us today.
These materials are not from HUD, FHA, the USDA, or the VA. These materials were not approved by any government agency. They are independent of any government agency. We are not in any way affiliated with any organization listed or referenced within this website, including HUD/FHA/USDA/VA. The inclusion of various education, information, web links, or materials are not an endorsement of the Sender or any of its employees or business partners.For information directly from the VA, visit http://www.benefits.va.gov/HOMELOANS/
