Contrary to popular belief, not every person that serves in the military is eligible for VA loan benefits. You have to serve a specific amount of time in order to receive this benefit.
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The type of service, as well as the timing of your service, will determine how long you must serve in order to be considered a veteran.
Members of the Regular Military
If you served in the Army, Navy, Air Force, or Marines, you’ll have to determine if you served during wartime or peacetime.
If you served during wartime, you must have served 90 consecutive days and had an honorable discharge. If you served during peacetime, you must have served 181 consecutive days and had an honorable discharge. You can also still be active in the military, as long as you served enough time; you may also be eligible for the VA home loan benefit.
Other Eligible Veterans and Non-Veterans
If you served in the Reserves or National Guard you may be eligible, but you’ll need a little more time served. These veterans need at least six years of service in order to qualify for VA financing.
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You may also be eligible if you are a surviving spouse of a veteran that died while in the line of duty or as a result of his/her time on active duty.
Whether you served in the regular military, are a member of the Reserves, or are a surviving spouse, you must have proof of your eligibility for the VA loan.
The Certificate of Eligibility
If you’ve served enough time in the military or are entitled in some other way, you’ll have a Certificate of Eligibility. This COE comes from the VA. If you didn’t receive it upon discharge, you can request it from the VA. The easiest way is to have your lender requires it as they can get a copy of the COE in minutes by requesting it online. If you request it, either online or via mail/fax, it could take a few weeks to get to you, so make sure you plan accordingly.
The COE will let a lender know that you are eligible for the VA loan. It will also let them know how much entitlement you have for the loan. The entitlement is the amount of the loan that the VA will guarantee in your name. This means that if you default on the loan, the VA will pay the lender back. This is what allows lenders to provide 100% financing to veterans with flexible underwriting guidelines.
If you served enough time to be eligible for a VA loan, use its flexible guidelines to get the home you want. You can buy the home with no money down, a decent credit score, and flexible debt ratio. It may make it easier for those that served our country to fulfill their dreams of becoming a homeowner.
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