Veterans United Home Loans stands as a leading provider of VA loans, helping countless veterans and military families achieve homeownership. As the #1 VA lender for homebuyers in 2021, this company specializes in navigating the unique benefits and requirements of VA-backed mortgages.
Veterans United offers competitive VA loan rates for purchases, refinances, jumbo loans, and cash-out options, tailoring their services to meet the diverse needs of military borrowers. Their online platform allows potential homebuyers to compare rates based on credit score, loan type, and current market conditions, streamlining the initial steps of the mortgage process.
The company’s commitment to serving military personnel extends beyond just providing loans. Veterans United offers educational resources to help borrowers understand how to leverage their VA benefits effectively, including guides on using Basic Allowance for Housing (BAH) for VA loans. With 24/7 customer support and a team of licensed loan officers, Veterans United aims to simplify the path to homeownership for those who have served their country.
Understanding Veterans United Home Loans
Veterans United Home Loans specializes in VA loans for military members and veterans. The company offers unique benefits and services tailored to those who have served in the armed forces.
History and Overview of Veterans United
Veterans United Home Loans was founded in 2002 and has grown to become the largest VA lender in the United States. The company is headquartered in Columbia, Missouri and operates nationwide.
Veterans United focuses exclusively on VA loans, leveraging their expertise to serve military members, veterans, and their families. They have consistently ranked as the top VA purchase lender since 2016.
The company prides itself on educating borrowers about VA loan benefits. Veterans United offers free credit counseling and provides extensive online resources to help potential homebuyers understand the VA loan process.
Specifics of VA Loans
VA loans are backed by the U.S. Department of Veterans Affairs and offer several advantages over conventional mortgages. Key benefits include:
- No down payment required in most cases
- No private mortgage insurance
- Competitive interest rates
- Relaxed credit requirements
The VA guaranty allows lenders like Veterans United to offer these favorable terms. Eligible borrowers can use their VA loan benefit multiple times.
Veterans United charges a 1% origination fee, capped at $3,500. This fee covers processing and underwriting costs. The company also offers a biweekly payment option, which can help borrowers pay off their loans faster and reduce interest charges.
The Homebuying Process for Veterans
Veterans United offers a streamlined homebuying process tailored for veterans and service members. The journey includes guidance for first-time buyers, a thorough preapproval process, and assistance in home searching through Veterans United Realty.
First-Time Homebuyers’ Guide
Veterans United provides comprehensive support for first-time homebuyers. The VA loan program offers significant benefits, including no down payment options and competitive interest rates.
First-time buyers can access educational resources to understand the VA loan process. These materials cover eligibility requirements, credit score considerations, and debt-to-income ratios.
Veterans United also connects buyers with housing counseling agencies. These services, often free or low-cost, offer personalized guidance on budgeting and financial preparation for homeownership.
Preapproval Process
The preapproval process is a crucial step in the VA loan journey. It helps veterans determine their budget and demonstrates their buying power to sellers.
To start, veterans submit financial documents, including proof of income and employment history. Veterans United reviews this information to assess loan eligibility and potential loan amounts.
The preapproval process typically includes:
- Credit check
- Income verification
- Asset evaluation
- Certificate of Eligibility (COE) review
Once preapproved, veterans receive a preapproval letter. This document strengthens their position when making offers on homes.
Searching for a Home with Veterans United Realty
Veterans United Realty assists veterans in finding suitable homes. Their network of real estate agents specializes in working with military buyers and understanding VA loan requirements.
These agents help veterans:
- Identify VA-approved properties
- Navigate local housing markets
- Understand property condition requirements for VA loans
- Submit competitive offers
Veterans United Realty also provides online tools for home searches. These platforms allow veterans to filter properties based on VA loan eligibility and personal preferences.
Agents work closely with Veterans United loan officers to ensure smooth communication throughout the homebuying process. This collaboration helps address any potential issues early in the transaction.
The Financial Aspects of Mortgages
Mortgages involve several key financial components that borrowers need to understand. These include different loan types, interest rates, and credit score requirements.
Loan Types and Options
VA home loans offer unique benefits for eligible veterans and service members. They allow qualified borrowers to purchase homes with no down payment. This contrasts with FHA loans, which typically require a 3.5% minimum down payment, and conventional loans that often need 5% down.
VA loans also have a funding fee. First-time users pay 2.15% of the loan amount on purchases or cash-out refinances. Subsequent uses increase this fee to 3.3%. VA Streamline refinances have a lower 0.5% fee.
Conventional loans and FHA loans are alternatives for those who don’t qualify for VA loans. Each has its own set of requirements and benefits.
Understanding Mortgage Rates
Mortgage rates play a crucial role in determining monthly payments and total loan costs. Rates can vary based on loan type, credit score, and market conditions.
VA loans often offer competitive rates compared to conventional mortgages. This is due to the government backing, which reduces risk for lenders.
Fixed-rate mortgages maintain the same interest rate throughout the loan term. Adjustable-rate mortgages (ARMs) have rates that can change periodically.
Borrowers should compare rates from multiple lenders to find the best deal. It’s important to consider both the interest rate and Annual Percentage Rate (APR) when evaluating loan offers.
Credit Score Requirements
Credit scores significantly impact loan approval and interest rates. Different loan types have varying minimum credit score requirements.
For VA loans, there’s no official minimum credit score set by the Department of Veterans Affairs. However, many lenders prefer scores of 620 or higher.
FHA loans typically require a minimum credit score of 580 for maximum financing. Conventional loans often need higher scores, usually 620 or above.
Higher credit scores generally lead to better interest rates and loan terms. Borrowers with lower scores may face higher rates or stricter requirements.
Improving credit scores before applying for a mortgage can lead to more favorable loan terms and potentially save thousands over the life of the loan.
VA Loan Eligibility and Requirements
VA loans offer unique benefits to veterans and military families. These loans have specific eligibility criteria and documentation requirements that applicants must meet.
Eligibility Criteria for Veterans and Military Families
Active duty service members, veterans, and eligible surviving spouses can qualify for VA loans. The eligibility criteria include:
- 90 consecutive days of active service during wartime
- 181 days of active service during peacetime
- 6 years of service in the National Guard or Reserves
Veterans United requires a Certificate of Eligibility (COE) to verify service history. Applicants can obtain this document through the VA or with help from their lender.
Discharged veterans must have received an honorable discharge. Those with other discharge types may still qualify, depending on the circumstances.
Loan Requirements and Documentation
VA loans have specific requirements beyond service eligibility:
- Minimum credit score (typically 620)
- Stable income
- Acceptable debt-to-income ratio (usually 41% or lower)
Required documentation includes:
- DD Form 214 (for veterans)
- Recent pay stubs and W-2 forms
- Bank statements
- Tax returns
The VA doesn’t set a maximum loan amount, but lenders may have their own limits. Borrowers must occupy the home as their primary residence.
VA loans don’t require a down payment, but making one can reduce the VA funding fee. This fee varies based on service type and loan usage.
Down Payments and Funding Fees
VA loans offer unique benefits for eligible veterans, including potential zero down payment options and a funding fee structure that varies based on loan usage and down payment amount.
0% Down Payment Feature of VA Loans
VA purchase loans allow qualified borrowers to finance 100% of the home’s value without a down payment. This feature makes homeownership more accessible for many veterans. While a down payment isn’t required, making one can reduce the loan amount and potentially lower the VA funding fee.
Veterans who choose to make a down payment of 5% or more can benefit from reduced funding fees. For example, a first-time VA loan user making a 5% down payment would pay a lower funding fee compared to someone opting for no down payment.
VA Funding Fee Explained
The VA funding fee is a one-time charge applied to VA loans to help sustain the program. As of 2024, first-time VA loan users face a 2.15% funding fee for loans with no down payment. This fee increases to 3.30% for subsequent use.
The funding fee is calculated based on the loan amount, not the purchase price. For a $200,000 loan with no down payment, a first-time user would pay $4,300 in funding fees. Making a down payment can significantly reduce this cost.
Some veterans may be exempt from the funding fee, including those receiving VA disability compensation. It’s crucial for borrowers to understand their specific funding fee obligations when considering a VA loan.
Affording a Home
Securing a home loan and managing mortgage payments are crucial aspects of homeownership for veterans. VA loans offer unique benefits, but understanding the financial responsibilities is essential.
Dealing with Closing Costs
VA loans allow veterans to finance closing costs, reducing the upfront expenses. Many lenders offer seller concessions, where the seller pays a portion of the closing costs. Veterans can negotiate these terms during the home purchase process.
Some closing costs can be rolled into the loan amount, spreading the expense over the life of the mortgage. This option helps veterans who may have limited savings for upfront costs.
VA funding fees are a one-time charge that can also be financed into the loan. Disabled veterans may qualify for exemption from this fee, further reducing their out-of-pocket expenses.
Financial Planning for Mortgage Payments
VA loans often feature competitive interest rates, making monthly payments more affordable. Veterans should use a VA loan calculator to estimate their potential mortgage payments based on home price, interest rate, and loan term.
Creating a budget that accounts for property taxes, homeowners insurance, and maintenance costs is crucial. These expenses are typically included in the monthly mortgage payment through an escrow account.
Veterans should aim for a debt-to-income ratio of 41% or less to ensure comfortable affordability. This ratio helps determine how much of their income can be allocated to housing expenses while maintaining financial stability.
Building an emergency fund is advisable to cover unexpected home repairs or temporary loss of income. Financial experts recommend saving 3-6 months of living expenses as a safety net.
Refinancing Options
Veterans United offers two main refinancing options for VA loan holders: VA Streamline Refinance and VA Cash-Out Refinance. These programs provide opportunities to lower interest rates, change loan terms, or access home equity.
Benefits of VA Streamline Refinance
The VA Streamline Refinance, also known as an Interest Rate Reduction Refinance Loan (IRRRL), offers a simplified process for existing VA loan holders. This option allows veterans to refinance quickly and with minimal paperwork.
Key advantages include:
- Lower interest rates
- Reduced monthly payments
- No appraisal required in most cases
- Ability to switch from an adjustable-rate to a fixed-rate mortgage
The IRRRL typically has lower closing costs compared to other refinance options. Veterans can often include these costs in the new loan amount, minimizing out-of-pocket expenses.
Choosing a VA Cash-Out Refinance
A VA Cash-Out Refinance allows homeowners to tap into their home equity while potentially lowering their interest rate. This option is available to veterans with both VA and non-VA mortgages.
Benefits of a VA Cash-Out Refinance include:
- Access up to 100% of home equity
- Consolidate high-interest debts
- Fund home improvements or other expenses
Eligibility criteria for a VA Cash-Out Refinance are more stringent than the IRRRL. Borrowers must meet credit score requirements and undergo a full underwriting process, including a new appraisal.
Veterans should carefully consider their financial goals and compare the long-term costs before choosing a refinance option.
Additional Home Loan Resources
Veterans have access to valuable resources beyond the standard VA loan. These tools can help maximize homeownership benefits and reduce costs.
Leveraging Home Equity
Home equity is the difference between a property’s value and the outstanding mortgage balance. Veterans can tap into this equity through VA cash-out refinance loans. These loans allow homeowners to borrow against their equity for various purposes, such as home improvements or debt consolidation.
VA cash-out refinances often offer better rates than conventional options. They can fund up to 100% of the home’s value in some cases. This flexibility gives veterans more financial options and potential savings.
Avoiding Private Mortgage Insurance
VA loans offer a significant advantage by not requiring private mortgage insurance (PMI). PMI is typically required on conventional loans when the down payment is less than 20% of the home’s value.
By eliminating PMI, VA loans can save veterans hundreds of dollars per month. This benefit applies even with no down payment, making homeownership more affordable. Veterans should consider this cost-saving feature when comparing loan options.
VA loans also don’t have mortgage insurance premiums for the life of the loan, unlike some FHA loans. This long-term savings can add up to thousands of dollars over the course of homeownership.
Customer Support and Resources
Veterans United Home Loans offers various support options for customers dealing with mortgage-related issues. The company provides multiple contact methods and resources to assist borrowers throughout their home loan journey.
Navigating Mortgage-Related Complaints
Veterans United Home Loans maintains a dedicated customer support team to address mortgage-related complaints. Borrowers can reach out via phone at 573-876-2600 or toll-free at 1-800-884-5560. These lines connect customers to relevant departments for prompt assistance.
For those preferring digital communication, Veterans United offers an online contact request form. This allows borrowers to request a callback at their convenience.
The company’s Help Desk provides additional support options. Customers can sign in to their online accounts to track progress, manage payments, and access personalized assistance.
If borrowers receive calls from Veterans United, the caller ID will display 573-876-2600. Those wishing to be removed from call lists can contact the Client Advocate team at 1-800-212-5200 for immediate help.
