VA Loans

This type of government-backed mortgage allows eligible active-duty service members, veterans and eligible surviving spouses to finance a home. They can get a mortgage with no down payment, no mortgage insurance and lenient credit requirements. Understanding how a VA loan works will help you determine if it's the right mortgage for your purchase or refinance plans.

These Loans are provided by private lenders, such as banks and mortgage companies. The VA guarantees a portion of the loan, enabling the lender to provide you with more favorable terms.

One key distinction of VA loans is that they require a property appraisal that can be more stringent than traditional appraisals. This is especially true if some parts of the house are not move-in ready. VA loans also allow for a maximum 41% back-end debt-to-income ratio. This means your total monthly debts, including your projected VA mortgage payment, can't exceed 41% of your monthly pre-tax income.

VA loan eligibility requirements:

• Served 90 consecutive days of active service during wartime.
• Served 181 days of active service during peacetime.
• Served more than six years with the National Guard or Reserves (or 90 days under Title 32 with at least 30 of those days being consecutive)