VA Loans Explained: The Complete Guide for Veterans & Military Families
| April 03 2024
| Published by MSJ Mortgage
At Mission San Jose Mortgage, we’re honored to serve those who’ve served our nation. VA Loans are one of the most powerful benefits available to veterans, active-duty service members, and military families—offering $0 down, no PMI, and competitive rates.
This Ultimate Guide covers every aspect of VA Loans from understanding what they are and why they’re the best choice for military families, to eligibility requirements, interest rate options, homebuying process, refinancing, and how MSJ Mortgage helps you secure the best terms at every step.
What is a VA Loan ?
VA Loans are a powerful home financing benefit designed exclusively for those who’ve served our country. Available to qualified active-duty service members, veterans, and surviving spouses, these government-backed mortgages provide exceptional terms—whether you’re buying your first home, building, renovating, or refinancing.
Making the Right Choice for Your Situation
Who Qualifies for a VA Loan?
VA loan eligibility comes down to two key approvals - one from the government and one from your lender.
At Mission San Jose Mortgage, we help veterans navigate both sets of requirements to secure their VA loan approval. Even if you don't meet every conventional loan standard, VA guidelines often provide more flexibility for qualified service members.
Understanding Your VA Loan Interest Rate Options
VA loans offer flexibility in how you structure your interest rate, with two primary options to consider:
Making the Right Choice for Your Situation
Selecting between fixed and adjustable rates depends on your:
Timeline (how long you'll keep the loan)
Risk tolerance (how long you'll keep the loan)
Financial goals (how long you'll keep the loan)
At Mission San Jose Mortgage, our loan officers help you:
Compare current fixed and ARM rate options
Project potential savings with each loan type
Choose the optimal structure for your financial situation
Navigating VA Loans in the Homebuying Process
Purchasing a home can feel overwhelming, especially for first-time buyers. When using a VA loan, there are specific requirements designed to protect your investment and ensure you're getting a safe, sound property. Here's what you need to know:
VA Property Requirements
The Department of Veterans Affairs has set specific Minimum Property Requirements (MPRs) to make sure homes purchased with a VA loan are safe, livable, and don’t come with costly or hazardous issues.These MPRs are checked by a VA-certified appraiser before your loan can be approved. The evaluation includes things like whether the property has enough space, a reliable roof, and functioning heating and cooling systems.
Understanding VA Funding Fees
The VA funding fee is a one-time charge made to the Department of Veterans Affairs, designed to support the continuation of the VA loan program for future eligible borrowers. You can either pay this fee upfront or include it in your total loan amount.
There are three main things that influence how much your VA funding fee will be:
Whether you’ve used a VA loan before
The size of your down payment, if you’re making one
The total loan amount you’re borrowing
Although VA loans do come with a funding fee, the advantages they offer usually make it worthwhile. And in some cases, certain borrowers may not have to pay this fee at all.
3 Types of Homes You Can’t Buy with a VA Loan
VA loans are strictly for primary residences, meaning you cannot use them for:
Rental Properties – Must be your main home
Vacation Homes – No second-home purchases
Fixer-Uppers – Home must be move-in ready (no major repairs needed)
VA Refinance
For veterans and military service members who already have a mortgage, VA refinancing offers two valuable options to improve their financial situation: the VA IRRRL (Interest Rate Reduction Refinance) program and the VA cash-out refinance.
The VA IRRRL helps homeowners with existing VA loans get better terms - lowering their interest rate, adjusting the loan length, or switching from an adjustable to fixed rate. This option doesn't let you take cash out, and you'll need to have originally bought the home with a VA loan to qualify.
On the other hand, a VA cash-out refinance turns your home's equity into usable funds. Whether you need money for renovations, paying off debts, or other expenses, this choice gives you access to that cash while keeping your VA loan benefits.
How to refinance your VA loan
To begin the VA loan refinance process, you’ll need to provide your Certificate of Eligibility (COE). Once your eligibility is confirmed, you can move forward with either the IRRRL or the VA cash-out refinance option. Both refinancing routes offer flexible requirements and give you access to competitive interest rates and associated costs.
Ready to Take the Next Step?
We’ve walked through everything you need to know about VA loans—from their unbeatable benefits and eligibility requirements to your refinancing and home buying options. Now, do you feel confident and ready to move forward on your path to homeownership or upgrading your current home?
You don’t have to navigate this journey alone. Just like in service, having the right team makes all the difference. At Mission San Jose Mortgage, we’re here to simplify the mortgage process for you. You bring the vision—we’ll handle the details. Let’s make it happen together.