VA Loans: Which One is Right for You?
A Veteran’s Affairs Loan can be an excellent choice for active and veteran members of the US Armed Forces to use when it comes time to buy a home. But what many people don’t know is that there is no one single VA Loan. Instead, there are many different types that each offer something different to help people with specific needs. Here are all of the different types of VA home Loans and what they can do for you when purchasing your home, in Jupiter Key or elsewhere.
VA Purchase Loans
This is the loan most people think of when hearing the term “VA Loan.” A purchase loan lets home buyers purchase a home without a down payment, and there are no closing costs, either. However, buyers still have to pay a VA Funding Fee, which helps keep the program running so it can keep offering its services in the future. However, the applicant may not have to pay this fee if they meet certain criteria, such as having a service-related disability.
Specially Adapted Housing (SAH) Grant
SAH Grants help disabled veterans build or modify an existing home to make it accessible for their specific needs. This grant can help with things like adding wheelchair ramps, building a first floor bedroom. If the buyer would rather have a new home built rather than remodel, the grant can also help them build a home whether they already own property to build on or not. In some cases, either the veteran or one of their family members can legally own the home.
Special Housing Adaptation (SHA) Grant
It’s easy to get SHA Grants confused with the previously mentioned SAH Grants. Not only do they do similar things, but they names are similar as well. The main difference between the two is that SHA Grants will only let disabled veterans buy or modify a home while SAH Grants will let veterans do that as well as build a custom home.
Cash-Out Refinance Loan
These loans are unique compared to the others because Cash-Out Refinance Loans aren’t only for homes. Instead, they let homeowners take cash out of their home’s equity so they can use it for things like student loans, paying off debts, home improvements, and other expenses. These loans can also be used to refinance a normal loan into a VA loan.
Native American Direct Loan
These loans are only available to Native Americans who would like to either purchase a home or property on Native Trust Land. To be eligible, an applicant must have a valid Certificate of Eligibility (COE). This loan also doesn’t require a down payment, and the maximum loan limit in most areas is more than $424,000. However, it does require the buyer to pay reduced closing costs.
Interest Rate Reduction Refinance Loan (IRRRL)
IRRRL Loans can lower a homeowner’s current interest rate by refinancing the VA loan they already have. It will also let a homeowner refinance an adjustable rate mortgage into a fixed rate mortgage, though this may cause the interest rate to increase. Because applicants must already have another sort of VA loan to be eligible for an IRRRL loan, the process for this loan is the fastest and least complex of them all. Like a Purchase Loan, IRRRL Loans also require that the homeowner pay a VA Funding Fee unless they meet certain requirements.
These are all the different types of VA Loans. Each one was created specifically to help different people who all have unique needs. This guide should help veterans learn the basics about them, but it’s important to do plenty of research before applying.