Top 20 Conventional Mortgage Questions and Answers

1. What is a VA Loan?

A VA loan is a mortgage loan in the United States guaranteed by the Department of Veterans Affairs, designed to offer long-term financing to eligible American veterans or their surviving spouses.  Click here to see if you qualify.

2. Who is Eligible for a VA Loan?

Eligibility is extended to service members, veterans, reservists, National Guard members, and some surviving spouses. You must have satisfactory credit, sufficient income, and a valid Certificate of Eligibility (COE). Click here to see if you qualify.

3. What Can a VA Loan Be Used For?

VA loans can be used to buy, build, repair, retain, or adapt a home for personal occupancy.

4. Is There a Down Payment Required for a VA Loan?

No, one of the primary benefits of a VA loan is the possibility of 0% down payment.

5. Do VA Loans Require Private Mortgage Insurance (PMI)?

No, VA loans do not require PMI. This is a significant cost-saving benefit.

6. What is the VA Funding Fee?

The VA funding fee is a one-time payment that the borrower pays on a VA-backed or VA direct home loan. This fee helps lower the cost of the loan for U.S. taxpayers since the VA home loan program doesn’t require down payments or monthly PMI.

7. Can the VA Funding Fee Be Waived?

Yes, the VA funding fee can be waived for veterans receiving VA compensation for service-connected disabilities, among other exemptions.

8. How Do I Obtain a Certificate of Eligibility (COE)?

You can apply for a COE through the VA’s eBenefits website, by mail using VA Form 26-1880, or through your lender using the VA’s ACE (Automated Certificate of Eligibility) system.

9. What is the Maximum Loan Amount for a VA Loan?

While the VA doesn’t set a maximum loan amount, lenders typically will lend up to four times a veteran’s available entitlement without requiring a down payment, subject to credit and income qualifications. Click here to see if you qualify.

10. Are There Closing Costs with VA Loans?

Yes, there are closing costs, but they are generally lower compared to other financing types. Some fees and costs may be covered by the seller or even the lender.  Click here to see if you qualify.

11. Can I Refinance a VA Loan?

Yes, the VA offers the Interest Rate Reduction Refinance Loan (IRRRL) for refinancing an existing VA loan, and the Cash-Out Refinance Loan allows refinancing of a non-VA loan into a VA loan.  Click here to see if you qualify.

12. What is the Interest Rate on a VA Loan?

Interest rates for VA loans are competitively set by lenders and can be lower than traditional mortgage rates.  Click here to see if you qualify.

13. Can I Use a VA Loan More Than Once?

Yes, your VA loan benefit is reusable as long as you pay off the previous loan before obtaining a new one. You may also have the ability to have more than one VA loan at a time, depending on your remaining VA loan entitlement and your lender’s criteria.  

14. Do VA Loans Have Prepayment Penalties?

No, VA loans do not have prepayment penalties, allowing you to pay off your loan early without fees.

15. Can I Purchase a Fixer-Upper with a VA Loan?

Yes, but the property must meet the VA’s minimum property requirements (MPRs). A VA renovation loan might be an option for properties needing repairs.  Click here to see if you qualify.

16. How Does Bankruptcy Affect Eligibility for a VA Loan?

Bankruptcy doesn’t permanently disqualify you from obtaining a VA loan. However, you’ll typically need to wait two years after bankruptcy to qualify.  Click here to see if you qualify.

17. Can I Get a VA Loan with Bad Credit?

While the VA doesn’t set a minimum credit score, lenders typically do, often requiring a score of 620 or higher. However, lenders may have flexibility with credit criteria.  Click here to see if you qualify.

18. What Are the Minimum Property Requirements (MPRs) for a VA Loan?

MPRs ensure the home is safe, sanitary, and structurally sound. VA appraisers will check the property to ensure it meets these requirements.  

19. Can I Use a VA Loan for an Investment Property?

No, VA loans are intended for primary residences only.

20. How Long Does the VA Loan Process Take?

The VA loan process timeline varies but generally takes about 30 to 45 days from application to closing, like other loan types.  Click here to see if you qualify.