Key takeaways
- A VA loan can be used with no down payment and has no monthly private mortgage insurance.
- Request your Certificate of Eligibility (COE) before you start touring.
- The VA appraisal also checks that the home is safe, sound and sanitary.
- Ask early what closing costs the seller can pay, and get it in writing.
East Tennessee has a long line of military families, and Veterans Day is a good week to talk about one of the benefits earned by service: the VA home loan. If you served and you are thinking about buying in Clinton, Oak Ridge, Powell, Norris or anywhere in Anderson County, here is what to know before you shop. This is general information, not lender advice. Your lender confirms what applies to you.
What the VA Loan Offers
A VA loan is a mortgage backed by the U.S. Department of Veterans Affairs for eligible veterans, active-duty service members and some surviving spouses. It can be used with no down payment, and it does not carry monthly private mortgage insurance. Instead there is a one-time VA funding fee, which can be financed into the loan and is waived for veterans receiving VA disability compensation. It is for a home you will live in, not an investment property.
Start With the Certificate of Eligibility
Your lender will ask for a Certificate of Eligibility, called a COE. You can request it through the VA at benefits.va.gov, and many lenders can pull it for you. Do this before you start touring so an offer is not waiting on paperwork.
The Appraisal Matters
A VA appraisal checks the value of the home and also that it meets the VA's minimum property requirements. The home needs to be safe, sound and sanitary. A leaking roof, peeling paint on an older house or a failing system can slow things down.
Sometimes a listing agent will say a house will not pass VA. Often that is not true. Ask what specifically they are worried about. A good agent will help you read the listing, look for those items before you write an offer, and talk with the other side so the offer is taken seriously.
Closing Costs
VA rules limit what a buyer can be charged, and sellers are allowed to pay certain closing costs on your behalf. How much and which costs depend on the contract and your lender, so ask early and put it in writing.
What to Do This Week
Request your COE, talk with a lender who works with VA loans regularly, and ask for a written estimate before you pick a home. Then tell your agent what you learned so your offer is built around it.
Thank you to every veteran in Anderson County. If you are buying or selling, call us. We are happy to walk through the process with you.
Common questions
Do VA loans require a down payment?
A VA loan can be used with no down payment and does not carry monthly private mortgage insurance. There is a one-time VA funding fee, which can be financed.
What is a Certificate of Eligibility?
A COE shows your lender you qualify for a VA loan. You can request it through the VA at benefits.va.gov, and many lenders can pull it for you.
Will a house pass a VA appraisal?
The home needs to be safe, sound and sanitary. A leaking roof or a failing system can slow things down, but an agent saying a house will not pass VA is often not true.