- Past and present veterans can take advantage of VA home loans.veterano de gerra image by Norberto Lauria from Fotolia.com
The U.S. Department of Veterans Affairs provides home loans to retired and active duty military members. These loans provide low interest rates and flexible underwriting terms. Many military personnel take advantage of the great options available with VA home loans. Although approval for a VA loan is almost guaranteed, the uses of the loan are limited by some restrictions. - Borrowers can purchase a home or mobile home with VA loans. The home must serve as the primary residence. Second homes and income-producing properties cannot be financed with a VA home loan. Multi-family homes can be purchased using a VA loan under some stipulations. If a property contains more than one unit, they must all have the same owner if being purchased with a VA loan. In addition, commercial properties cannot be purchased using this type of loan. However, the use of 25 percent of the home for business purposes is acceptable.
- Purchasing a vacant lot with the intent to build a home or place a manufactured home on the land is acceptable with a VA loan. If intending to build a home, the VA requires that a construction loan is also taken out. Using a VA loan to purchase only a lot with no intent to place a home on it is not allowed.
- VA loans can be used to refinance existing VA home loans. Many people consider refinancing the terms of a first mortgage to get lower payments and lower interest rates. VA refinance loans offer the same benefits as a first VA home loan. They both offer better terms than conventional mortgages. VA refinance loans are often approved and completed more quickly than a conventional refinance. They are known as "streamline refinances."
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