How Does a VA Loan Work
For St. George Utah Veterans
Today, we want to explain to all the St. George Utah veterans out there that need to understand how their VA home loan works.
The truth is that the Department of Veterans Affairs, well, they don't advertise it and mortgage loan originators don't understand it. So how in the world can we expect our veterans and active duty military to understand it? Well, that's why we are here today, to provide and assist all veterans and active duty service members with all of their VA home financing needs. So let's talk about the VA loan.
The VA loan is the only, only, only, only, did I say only, 100% financing loan product that's available on the marketplace today, that a veteran can purchase a Southern Utah home up to $453,100.
Now here's the deal. That number can change depending upon what county you're from. Everyone in Washington County Utah loan limits are 453,100. So make sure to reach out to your local mortgage originator to determine what the maximum loan amount with no money down if you're in a different Utah County.
In addition to that, the VA, once again does not require any money down, allowing you to obtain that 100% financing loan with no private mortgage insurance, which is huge. And the reason why it's huge, it's because it saves you money.
So if you were to look at an FHA loan or a conventional loan, both of these loans would require, assuming that the conventional loan was higher than a 80% loan to value, and the FHA, well, it has it for life, both of these loans would require private mortgage insurance. The VA loan has no PMI, once again saving you money.
Now here's where the VA loan gets really good. There's a lot of information out there that the veteran community does not know about how it works. Things like you can have more than one at a time. Yes, I said it. St. George veterans you can have more than one VA home loan at a time.
So the reason why this is so important for example, you wanted to purchase a home. You lived in that home for a little while and then you ended up purchasing a home later on down the road. You could put a renter in that home and go out and find a new home in a more desirable location, bigger square footage, better school district, a house with the pool, whatever the case may be. So that's a huge advantage to have more than one VA loan at a time.
In addition to that, the VA loan, keep in mind, never expires. It never goes away. So there's a lot of veterans out there, or Vietnam veterans, for example, that think because maybe they never used it, it goes away. Or they think that because maybe they used it once, that they can't use it again. Both of these are not true.
The VA loan, available for single family residences. It's available for condominiums. It's also available for manufactured housing. And last but not least, guess what? You can purchase a multiunit dwelling with a VA loan. So there's all kinds of amazing things that veterans and active duty service members can do with their VA loan.
Lastly, we want to talk to you a little bit about how the VA loan works. I think a lot of veterans get confused when it comes to discussing really what the VA does. So first and foremost, understand this. The VA does not lend the money. Yes, I said it. They don't lend the money. The mortgage loan originator, or I should say the mortgage company, is the one that's lending you, the veteran, the money. So what does that even mean? It means that the VA just guarantees the loan.
So say for example, a veteran gets a home up to $453,100. The veteran unfortunately ends up foreclosing on that home. So watch what happens next. The VA would send a check for 25% of that loan amount to that specific lender for the loss. So that's all the VA does veterans. Understand that the VA has their own set of guidelines.
Well guess what? So too does the mortgage lender, it's called lender overlay. So they put them on top of the VA guidelines. So what does that mean to you?
It means that one mortgage lender might say no to your VA loan and the other one might say yes. So it's very important to work with a mortgage originator, somebody like VA Loans St. George Utah, who specializes in VA loans that can answer all of your questions about your VA loans in your local area.
Lastly, keep in mind that there are two particular forms that you'll always need, a certificate of eligibility and a DD214, both items that are extremely important when it comes to using your VA loan.