Thousands of military members transition yearly from active duty to civilian life. And with that transition comes the inevitable search for a new place to live, a steady job, and affordable housing. For many service members, buying a house is a top priority—and with good reason.
But getting into the housing market can be challenging for veteran homebuyers, especially when financing their dream home. Fortunately, several mortgage programs are available to military members with specialties specifically geared toward their unique circumstances.
If you’re an Alabama-based veteran or potential homebuyer looking to get a housing loan quicker, read on for everything you need to know about VA mortgage loans in Alabama and how they could help you get your new home sooner than you ever thought possible.
What Are Va Mortgage Loans?
A VA loan is a home mortgage that may be guaranteed, in part, by the Department of Veterans Affairs (VA). The loan is used to purchase or refinance a primary residence. Except for a few minor differences, VA mortgage loans function similarly to other popular mortgage options.
- No Down Payment
VA mortgage loans offer a way to buy a home without making the usual down payment. To qualify for this benefit, you must meet certain financial requirements and be willing to pay some money upfront if your FICO score is subpar. Lenders have different requirements for the FICO score, so borrowers need to ask a loan officer what that institution’s standards are.
- The Loans Are Used Only For Primary Residences.
You cannot use a VA loan to buy an investment property or vacation home. However, you may be able to qualify for one if you are buying a duplex or other multi unit residence and plan on living in one of the units. The program is mainly designed for single-family homes, condos, and modular housing that are “move-in ready,” — but it also applies to multi unit properties.
- They’re Available Despite Foreclosure Or Bankruptcy
Unlike many loan programs, bankruptcy, a lower credit score, or foreclosure does not disqualify you from a VA home loan. VA loan guidelines do not require a certain minimum credit score to qualify for a mortgage, giving lenders more flexibility in their approval processes. In addition, the VA considers your credit history “re-established” two years after successfully recovering from bankruptcy or foreclosure proceedings.
- Va Loans Can Be Used To Refinance An Existing Mortgage
Veterans can use the VA loan benefit to refinance an existing non-VA mortgage. You do not have to use the same lender as your original transaction, and a VA interest rate may be more competitive than other rates!
Refinancing into a VA mortgage may be the right move for those looking for a lower mortgage rate or interested in getting out of an adjustable-rate loan.
However, Interest rates are determined by your FICO score, among other factors. Some people with low credit scores or “marginal” credit may pay higher interest than they otherwise would have because of those factors.
A loan officer will assess your creditworthiness for a VA mortgage, then consider the possibility of refinancing an existing non-VA mortgage into one.
Before you decide, it’s a good idea to consult with an experienced VA loan consultant. They can help you understand how the process works and what qualifications they need for a particular lender in Alabama. It’s also important to check out more than one lender if you have many options available because each offers different loan terms and conditions.