Back in 1944, President Franklin D. Roosevelt signed the GI Bill into law as a way to stimulate the economy by enabling veterans to obtain home loans. These “Veteran’s Administration Loans” were federally guaranteed and available with no down payment. Many veterans and their families’ dreams came true in the post World War II era and they became home owners.
VA Loans are still available today, and more than 25 million veterans are eligible for this type of financing. It is important to understand, though, that the loans are simply “guaranteed” by the VA. The actual financing has to be obtained through private lenders, such as banks and mortgage companies, just as traditional mortgages are. Another important point is that veterans can only qualify for the loan if it is for a home they will live in as their main residence.
What You’ll Need for Your VA Loan Application
If you’ve applied for any kind of loan before, you’ll find that the VA loan application process isn’t all that different. As with any loan, there are certain documents you’ll need on hand before you apply. Here is a list of what you’ll need for a VA loan application. (Remember, that if your spouse is applying along with you, he or she will need to provide the same items.) In addition to a Certificate of Eligibility and DD-214 (for veterans only), you’ll need:
• Your address for the past two years
• Social Security numbers
• Addresses and loan information of other real estate owned
• W2s for the past two years and current check stubs
• Your current gross monthly salary
• Estimated value of furniture and personal property
• Names and addresses of your employers over past two years
• Tax returns, income statement, and balance sheet if you are self-employed
• Names, addresses, account numbers and balances on all checking and savings accounts, as well as any current loans
You will also have to pay for a credit report on anyone who is applying for the loan as well as an appraisal for the property to be purchased.
Are There Advantages to a VA Loan?
The simple answer to that a resounding “yes.” And there are a number of reasons for this. First, you must consider the power of having the VA “back” your loan. Further, let’s say you wanted to purchase a farm, for instance, and a VA loan might give you the power to do that (as long as you also intended to live on the farm). You can also purchase properties that are located in American territories with your VA backed loan.
Another benefit of the VA loan is that if a veteran who is also a mortgage holder passes away during the term of the loan, the mortgage simply passes onto the spouse or the estate. (Keep in mind, though, that much like a conventional loan, the VA mortgage will like be bought and sold to different lenders over its live.)
The purpose of the VA loan has not blurred since the post-war era when they were first introduced. Today, they continue to pump up the nation’s economy by assisting veterans in living the American dream of becoming a home owner.