Group of three older Veterans

You are a veteran who has fought for your country, and now, you find yourself looking for an affordable home. A Florida VA loan may be just what the doctor ordered. VA loans are mortgages guaranteed by the U.S. Department of Veterans Affairs (VA) and issued by a private lender, such as a bank, credit union, or mortgage company. Since VA loans don’t require down payments, they can be significantly more affordable.

How do VA Loans Work in Florida?

VA loans work pretty much the same regardless of the state you live in. Because the government will repay the lender a portion of a VA loan if the borrower doesn’t make payments, this makes Florida mortgage brokers see VA loans as low risk, which makes it possible for them to offer favorable terms and require no down payment.

If eligible, you can complete the VA mortgage application process by clicking here.

three soldiers in uniform

Who is Eligible for a VA Home Loan?

You are likely eligible for a VA mortgage if:

  • You’re an active-duty military member or veteran
  • You meet the lender’s requirements for credit and income. The VA doesn’t set a minimum credit score for VA loans, but lenders can set their own minimum standards. The lender will also consider your income and debts to evaluate your ability to repay the mortgage.
  • The property you want to buy will be your primary residence.

For those who are the surviving spouses of fallen military men and women, you’ll have to show that you meet the military service or surviving spouse requirements, and you’ll need to get a VA certificate of eligibility before the loan closes. You can ask a VA-approved lender to obtain the document for you or request the certificate through the VA.

home with front lawn

Types of VA Loans

The VA loan program offers more than purchase mortgages, they also offer refinancing options and loans for home improvements:

  • A VA cash-out refinance replaces your mortgage with a new loan. The mortgage lender will pay off the current mortgage loan and issue a new one for the amount needed to pay off the loan (as well as any debts or simply cut the borrower a check for the difference once all payoffs and costs are paid off). For example, say that a client owes 200k on their mortgage, but takes out a loan for 300k—that means that the cash-out will be 100k. However, closing costs (which are typically 3%) will also be reduced. Some clients want the cash to pay debts, emergencies, improvements, or investments, while some use the funds to put a down payment on a 2nd or new home. Clients will leverage the equity in their home to make that move, however a VA cash-out doesn’t always make the monthly payments lower. This depends on the loan amount they take out and the rate of the loan.
  • A VA IRRRL loan is also called a streamline refinance loan. You can replace an existing VA loan with a mortgage offering a lower interest rate, or move from an adjustable-rate loan to one with a fixed interest rate.
  • VA renovation loans let borrowers buy or refinance a home and roll the cost of improvements into the mortgage.
  • VA supplemental loans for home improvements can be added to an existing mortgage or included in a VA refinance.
  • In addition, the VA offers a Native American Direct Loan program and adapted housing grants. The NADL program helps qualified Native Americans buy, build, improve or refinance a home on federal trust land. Adapted housing grants help veterans with service-related disabilities buy and improve homes for more accessibility.
Family cooking in kitchen

VA loan Benefits

After risking so much for your country, you should be entitled to a safer future. Which is why you should be aware of the pros and cons of Florida VA loans. Here are some the biggest advantages of VA loans compared with conventional and FHA loans:

  • No down payment or private mortgage insurance required: Other loan types require down payments and can include an extra cost for private mortgage insurance. FHA loans require mortgage insurance regardless of the down payment amount and conventional loans usually require mortgage insurance if the down payment is less than 20%.
  • Competitive interest rates: Average 30-year mortgage rates were lower for VA home loans than for FHA and conventional mortgages in every month of 2019.
  • Limited closing costs: The Department of Veterans Affairs limits the lender’s origination fee to no more than 1% of the loan amount and prohibits lenders from charging some other closing costs.

Disadvantages of VA Home Loans

Every type of loan has drawbacks for some borrowers. Here are some potential disadvantages of a Florida VA loan.

  • VA loan funding fee: Although VA loans don’t require mortgage insurance, they come with an extra cost called a VA funding fee. The fee is set by the federal government and covers the cost of foreclosing if a borrower defaults. The fee ranges from 1.4% to 3.6% of the loan, depending on your down payment and whether it’s your first VA loan. You can pay the fee upfront or fold it into the loan.
  • Purchase loans are only for primary homes: You can’t use a VA loan to buy investment property or a vacation home.
  • Not all properties are eligible: A VA-approved appraiser will evaluate the home you want to buy to estimate the value and make sure it meets the VA’s minimum property requirements. This means that in some cases, your home choices may be limited.

How Many Times Can You Use a Florida VA Loan?

Getting a VA loan isn’t a one-time deal. After using a VA mortgage to buy a home, you can get another VA loan if:

  • You sell the house and pay off the VA loan.
  • You sell the house, and a qualified veteran buyer agrees to assume the VA loan.
  • You repay the VA loan in full and keep the house. For one time only, you can get another VA loan to purchase an additional home as your primary residence.

We hope that this article has opened your eyes to the possibilities that are open to veterans or surviving spouses of veterans. At Rate Leaf, we know that what you’ve done for our country is give us a lifetime of service, which is why we are now offering something that is unheard of—2.5% rates on our VA mortgage loans—(the lowest you’ll ever find) so that your post-service life can be stable and peaceful.

Consider this our small way of thanking you for your service and recognizing your commitment to the American values of hard work and integrity. Thank you and happy Memorial Day!

*The principal and interest payment on a $200,000 30-year Fixed-Rate Loan at 2.875% and 80% loan-to-value (LTV) is $829.78. The Annual Percentage Rate (APR) is 3.097% with estimated finance charges of $5,600. The principal and interest payment does not include taxes and home insurance premiums, which will result in a higher actual monthly payment. Rates current as of 05/12/2020. The APR is calculated using the Actuarial Method.