If you’re an active duty soldier, retiree, qualifying dependent, reservist or veteran, you may qualify to buy a home in Sierra Vista using a VA loan. But if you’re like many people, you’re not exactly sure how it all works.
Using a VA loan to buy a home for sale in Sierra Vista, just outside Fort Huachuca, is actually a lot simpler than it seems. Here’s what you need to know.
Using a VA Loan to Buy a Home for Sale in Sierra Vista, AZ
If you’re currently in the military, you’re an honorably discharged veteran, or you’re a qualifying dependent, you may be able to use a VA loan to buy a home in Sierra Vista, Palominas, Hereford or any of the other communities near Fort Huachuca. Check out these VA loan FAQ to learn more.
What is a VA Loan?
A VA loan is a mortgage from a regular lender that’s backed by the Veterans Administration. You can use these loans to buy a primary home – a house you’ll live in – or to refinance an existing mortgage that wasn’t bought with a VA loan.
How Do VA Loans Work?
VA loans aren’t exactly the same as conventional mortgages are, but you can go to your regular lender to get one. While the money doesn’t come from the Veterans Administration, the loan is backed by the VA. That means the VA guarantees your lender that if you don’t make the payments, it will step in and help the lender cover its losses.
Because VA loans are backed by the U.S. government, lenders can offer you a loan with $0 down. Typically, VA loans come with very competitive interest rates and favorable terms, too. That’s all because the government backs these loans for service members, veterans and qualifying dependents.
Who’s Eligible for a VA Loan?
You must be an active duty service member, a member of one of the reserve components, a veteran or a qualifying dependent to use a VA loan. You have to get a certificate of eligibility from the VA (get yours here) before a lender will even consider giving you this type of loan.
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What Credit Score Do You Need for a VA Loan?
When it comes to buying a home in Sierra Vista or anywhere else, you’ve probably heard that you need a great credit score. But if you’re using a VA loan, you need to know that the VA doesn’t impose a minimum credit score. However, most lenders do.
Fortunately, though, the VA requires lenders to look at your entire financial picture when making a lending decision – and that means your credit score alone can’t disqualify you from buying a home with your VA loan benefit.
Can You Buy a Home in Sierra Vista With Nothing Down if You’re Using a VA Loan?
You can absolutely buy a home in Sierra Vista – or anywhere else – with nothing down if you’re using a VA loan. That’s one of the biggest benefits for people who use them. The VA doesn’t require any type of down payment in order to guarantee your loan, which means lenders can feel comfortable letting you borrow the full price of the home you want to buy.
If you have the money, you can definitely put money down on a house. Doing so will lower your mortgage payments and may even affect your interest rates. However, you do not have to make a down payment on a house when you use a VA loan.
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Do You Have to Pay for Private Mortgage Insurance if You Use a VA Loan With No Down Payment?
The VA doesn’t let lenders charge you for private mortgage insurance, or PMI, when you use a VA loan. That’s a big contrast from conventional loans, because most lenders will charge you for PMI unless you put down at least 20 percent of a home’s purchase price – and that can add up to tens of thousands of dollars over time.
Can You Use a VA Loan More Than Once?
If you’ve already used a VA loan to buy a home in the past, don’t worry – you can use the benefit again. The catch is that you must pay off your first VA loan before you can have another one. That means if you’ve paid off a home on a VA loan (either by making regular payments until you’ve paid it off or by selling the home), you can take out another one to buy a home in Sierra Vista.
What Kinds of Homes Can You Buy With a VA Loan?
Generally, you have to buy a “move-in ready” home with a VA loan. They’re not really designed for fixer-uppers because you can only borrow the amount the home is worth – you can’t borrow funds to make repairs. (However, you can use a VA loan to refinance the home you’re already living in so you can get cash for repairs.)
Can You Buy a Rental Home With Your VA Loan Benefit?
The VA won’t let you buy an investment property with this type of loan. They’re designed for primary residences. You can’t use your VA loan benefit to buy a home that you’ll move out of within 3 years. There’s a caveat to that, though: You might be able to use a VA loan to buy a duplex or other multi-family residence. If that’s something you want to do, it’s a good idea to talk to your lender about your options.
Can You Pay Off a VA Loan Early?
Some lenders require you to pay prepayment penalties when you have a conventional mortgage. What that really means is that they charge you for paying it off early – it’s the lender’s way of getting at least some of the money it would’ve earned through your interest payments.
There is no prepayment penalty with a VA loan, though. You can pay off your loan the day after you get it and you won’t pay an extra dime on your mortgage.
Are You Thinking About Buying a Home in Sierra Vista With a VA Loan?
If you’re considering using your VA loan to buy a home in Sierra Vista, I’ll be happy to help you find one that’s perfect for your needs. In fact, while you’re here, have a look at homes for sale here and in our neighboring communities: