VA home Loans

Georgia

One of the many benefits veterans and active-duty service members have access to is the Veterans Administration (VA) loan. The VA home loan program helps provide financing to veterans, active-duty service members, eligible surviving spouses, and certain family members.
This type of home loan isn’t available for every homebuyer, but if you are eligible, understanding the specifics of this loan will help you decide if you want to utilize it while buying a home. The benefits of this loan compared to a conventional mortgage are well worth considering as you start the homebuying process in Georgia.

Learn About VA Loans

VA Home Loan Benefit

Georgia VA loans are vital to our veterans, active military, and many surviving spouses. The VA loan program offers amazing benefits to those who are eligible, and these benefits help make homeownership far more accessible. Here are some advantages.

No Down Payment Required

With VA eligibility, you more than likely won’t have to worry about making a down payment when buying a home. A down payment is one of the most intimidating parts of buying a home since many lenders require around 3-5% of the purchase price. The typical down payment requirement is frequently waived with a VA loan, allowing that amount to be put toward the closing costs.

Many veterans and other eligible persons can’t afford this high down payment, so the VA's ability to remove this requirement is vital. VA loans allow buyers to finance 100% of the property value.

This advantage will benefit first-time home buyers, but those looking to buy a second or even fifth home can still benefit from it if they’re eligible. With no down payment, eligible parties can move into a primary residence in Georgia faster.

No Private Mortgage Insurance Premiums

Conventional loans are known for requiring down payments and requiring buyers to purchase private mortgage insurance (PMI). If the buyer can’t put down at least 20% of the purchase price for the down payment, the lender will likely require PMI.

One of the VA home loan benefits is no PMI requirement. It doesn’t matter if you choose to make a down payment. As long as you’re eligible, VA mortgage programs won’t make you obtain private mortgage insurance.

Saving money every month by not paying for PMI will help buyers get into their new homes without an additional financial burden.

Competitive Interest Rates

When you go with a conventional loan, the interest rate will likely be higher than with a Georgia VA loan. The VA offers competitive interest rates to eligible parties, making it a more desirable choice for homebuyers.

VA home loans tend to have lower interest rates than other types. With a lower interest rate, buyers can save that additional money for other expenses.

Flexible Credit Requirements

VA home loans are far more flexible regarding credit score requirements than conventional loans. However, just because VA mortgage programs are flexible regarding credit score requirements doesn’t mean they accept everyone.

A good rule of thumb is to have a credit score of at least 620 when applying. However, Pride Lending does work with lenders who will consider credit scores as low as 500. Working with a reputable company is essential to determine if you need to improve your credit score.

No Prepayment Penalties

Many home loans have penalties for those who try to pay off the loan early. Even though you might think paying off the loan earlier is better, depending on the penalties, the lender charges might not make it a good idea. That doesn’t apply to VA loans.

When taking out VA loans, you don’t have to worry about prepayment penalties. Since the Department of Veterans Affairs is committed to making home ownership accessible and affordable to those eligible, they don’t want to penalize those wishing to pay off the mortgage early. Avoiding prepayment fees ensures you can make additional payments to the loan's principal, making it easier to pay it off early.

Assistance for Struggling Borrowers

When it comes to getting a VA loan, the VA’s goal is to make it accessible to almost every veteran, active military service member, and, in many cases, surviving spouses. So, they often offer additional assistance to borrowers who might be struggling financially.

The Georgia Dream Program is a great program that can help homeowners secure funding to buy the homes they want and need. Buyers can also take advantage of other programs to help them. If someone’s struggling to make monthly mortgage payments or is at risk of foreclosure, the VA can help with payment assistance.

VA funding fees for 2024 amount to:

2.15% for a down payment between 0% and 4.99% (for first-time VA loan users)
3.3% for a down payment between 0% and 4.99% (for all subsequent uses)
1.5% for a down payment between 5% and 9.9%
1.25% for a down payment of 10% or more

Some borrowers are exempt from paying funding fees:

Veterans receiving or eligible for service-connected disability compensation
Borrowers with pending pre-discharge claims
Borrowers receiving Dependency and Indemnity Compensation
Purple Heart recipients

Georgia VA Loan Eligibility

Only some people can apply and qualify for VA loans. Not everyone qualifies for a conventional loan, but the VA has further guidelines that individuals must meet. The VA has very specific eligibility requirements for veterans, active duty service members, and eligible surviving spouses. To be eligible for VA loans in Georgia, you’ll need to meet the following requirements:

90 consecutive days of activity duty during wartime or 181 consecutive days of activity duty during peacetime
Six years of service for National Guard and Reserve members
Eligible surviving spouses

Obtaining a Certificate of Eligibility (COE) is critical before applying for a VA loan. A COE provides proof to lenders that you meet the specific requirements determined by the Department of Veterans Affairs to qualify for a VA loan. You must provide specific documentation to get a CEO. Veterans must provide a DD-214, while active service members need a statement of active duty.

In addition to the COE, you’ll need to provide standard documents you need to determine eligibility for a loan, including:

Credit report
Proof of income
Proof of debt
Proof of residency

The VA Loan Process in Georgia

Knowing the loan process when it comes to buying a home can help reduce the amount of stress involved. However, VA loans have additional steps compared to conventional loans. Here’s a look at the process for Georgia VA loans:

COE: The Certificate of Eligibility verifies a borrower's ability to get a VA Loan. You must provide proof of service to obtain a COE. Veterans need to provide their DD214. A statement of service is required if you’re on active duty, and it must include information such as your name, social security number, and the day you started service. Pride Lending can help you obtain your COE.
Finances: Carefully examine your finances before contacting mortgage brokers. You should know how much debt you pay monthly and how much you can afford for expenses such as mortgage insurance and payments. Consider how much you typically spend on necessities like car insurance and utilities. An expert at Pride Lending will work with you to help you determine your debt-to-income ratio.
Find a Lender: Working with a specialist like Pride Lending is crucial. Pride Lending can help connect you with lenders who can help you obtain home ownership. Pride Lending specializes in helping underserved communities, such as the LGBTQ+ community.
Choose a House: Local real estate agents can help you select a house that meets your needs. Carefully consider how many bedrooms and bathrooms you want in a home. Think about other factors, such as whether you’re willing to complete repairs. Always have a budget in mind when searching for a house.
Purchase Agreement: The buyer and seller sign a legally binding contract that outlines the terms of the sale. It’s common to include what repairs the seller must make before the purchase is finished. Many agreements outline deposit details, a timeframe for repairs, and other information regarding the sale. These contracts protect the buyer and seller.
Inspection and VA Appraisal: An inspection is often recommended because inspections tell buyers the home's condition, including repairs that must be made, and other details the buyer should know. For example, the inspector may point out that the roof must be replaced in a couple of years. These aren’t usually required, but they are advised to ensure buyers know the home's condition. Buyers must get a VA appraisal to get approved for a VA loan. Your lender or mortgage broker can help you find an independent VA appraiser to examine the property. The property must meet minimum requirements to be approved for a loan to ensure you don’t purchase an unsafe property.
Underwriting: Underwriting is the process lenders use to evaluate a borrower’s financial situation and level of risk. Lenders require applicants to submit proof of income, expenses, and assets. Lenders also want to see how much debt you have. A lender will determine your debt-to-income ratio, look at your credit score, and evaluate your risk level to determine your eligibility for a loan.
Closing: Finally, you attend the closing and sign all necessary papers. The funds are sent to escrow, and the loan is closed, which means it is finalized. Then, you can get the keys to your house.

VA Loan Limits and Funding Fees

All loans have limits, and Georgia VA loan limits are essential to know when you’re applying for this type of home loan. Funding fees are another critical component when considering applying for a VA loan in Georgia.

As of 2020, the VA has completely eliminated loan limits for the vast majority of veterans who have full VA loan entitlement. This means those who are eligible can borrow and finance a home with no down payment, no matter the amount of the loan.

For those with partial VA entitlement or those who want to buy a second home, VA loan limits will still be in place.

Funding fees are one-time fees that help offset the overall cost of the VA loan program. The funding fee amount can change depending on factors like the home buyer’s service history, whether it’s the first house or subsequent house, and the down payment amount.