VA loans are available if you are a member of the National Guard or Reserves. In order to qualify, there are some requirements that will need to be met before you can apply for your mortgage loan. You can save time by doing some preparation and information gathering before you apply for your VA loan.
Eligibility for Members of the National Guard or Reserves
Members of the National Guard or Reserves are not eligible right away for a VA mortgage loan. You must have served a minimum of six years in order to qualify for a loan, as required under Title 10 of the U.S. Code.
Once you have served at least six years, you will still have to be approved for a VA mortgage loan. Your lender will need to review your credit history, verify your employment information and determine the property valuation in order to give you a loan approval amount.
While Waiting to Become Eligible
While you are serving your 6-year eligibility requirement, you may be able to obtain a loan from HUD or the FHA if you receive an approval.
You should start to prepare for your VA mortgage loan while you wait to become eligible. Since the VA is not the entity that actually makes you a VA mortgage loan, you will have to do some research and find one or more lenders that make VA loans in your area. Once you have narrowed down your choices, make sure to compare their loan structures and interest rates so you can pick the one that best meets your needs. After your 6-year term of service has been fulfilled, you will then be ready to go to that lender and begin the application process.
If you have had some credit issues in the past that you are still in the process of repairing or if you are paying down other debt, continue to finalize these matters as the National Guard or Reserves 6-year time requirement begins to wind down.
If you have found a home that you want to purchase and you do not have 6 years served in the National Guard or Reserves, you may want to apply for a veteran’s loan with the Farmer’s Home Administration, or FHA. After you have been approved by the FHA and bought your new home, once your 6-year term of service requirement has been met, you can refinance the FHA loan in order to obtain a new VA mortgage loan.
If interest rates have come down while you served your 6 years, you may even be able to lower the mortgage loan payments when you refinance your FHA loan into a VA loan. Or you may choose to decrease the loan term and leave the payment the same as it is now. This will save you money on the finance charges you pay over the term of the loan.