VA Home Loans FAQ

Frequently asked questions about VA loans for purchases

Are you associated with the VA?

No. National Bank Of Kansas City is not a part of, nor are we affiliated with, the Veteran's Administration. The VA is a government agency, not a lender. The VA simply insures the mortgage, they do not loan the money. National Bank Of Kansas City is a national lender making loans in all 50 states.

What is a VA mortgage?

A VA mortgage is a guaranteed loan made by banks, savings and loans, or mortgage companies to eligible veterans for the use of purchasing a home. The guaranty means the lender is protected against loss if you fail to repay the loan. The guaranty also allows you to purchase the home without a down payment.

Does my VA entitlement guarantee that I will get approved for a home loan?

No. Each lender has a set of policies in regards to loan approval. The lender, though, must comply with VA income and credit standards.

When I purchase a home with a VA mortgage, how much do I need to put down?

You can purchase your home using VA status with $0 down.

How much can I borrow?

You can finance 100% of the home's value up to $417,000. Remember, your mortgage company must approve the total amount borrowed.

For a first time homebuyer, is getting a VA loan easier than a conventional mortgage?

If you don't have established credit, getting approved for a loan can sometimes be difficult. Credit and income standards are not as strict with VA loans, making the approval process easier.

If I don’t put 20% down, will I have to pay Private Mortgage Insurance (PMI)?

No. Because the loan is backed by the government, you are not charged PMI.

Are rates for VA loans comparable to conventional loan rates?

Interest rates for VA loans can be .5% - 1% lower than conventional loan rates.

How come not every mortgage broker or bank offers VA loans?

The Department of Veteran Affairs requires companies who offer VA loans to go through a thorough approval process. National Bank Of Kansas City is proud to be a VA approved lender. In fact, VA purchase and refinance mortgages make up more than 62%* of the loans we close on a annual basis.

How do I qualify for a VA mortgage loan?

The first step is to obtain a Certificate of Eligibility.

How do I get a Certificate of Eligibility?

Complete a VA Form 26-1880 Request for a Certificate of Eligibility. Then, submit the completed form to the Winston-Salem Eligibility Center along with proof of military service. It is sometimes possible for the VA to establish eligibility without proof of service; however, to avoid delays, it is best to provide the information.

What is the address of the Winston-Salem Eligibility Center?

VA Loan Eligibility Center
PO Box 20729
Winston-Salem, NC 27120

For overnight delivery:
VA Loan Eligibility Center
251 N. Main Street
Winston-Salem, NC 27155

Can you, as my lender, obtain my Certificate of Eligibility for me?

Yes. We have access to the portal and can establish eligibility and issue a Certificate of Eligibility online in a matter of seconds.

Is there a fee to get pre-qualified for a loan from a lender?

No. Pre-qualification is free.

Is the surviving spouse of a deceased veteran eligible for the home loan benefit?

The unmarried surviving spouse of a veteran who died on active duty or as the result of a service-connected disability is eligible for the home loan.

Are the children of a living or deceased veteran eligible for the home loan benefit?

No. Children are not eligible to use VA status for a home loan.

Is a guaranteed loan considered a gift from the VA?

No. Your mortgage loan must be repaid, just as you would repay any borrowed money. If you do not make your house payments, you could lose your home to foreclosure.

Can I get a VA loan for a home outside of the United States?

No. Unfortunately, the current law only allows the VA to guarantee loans on property located in the United States.

Can I qualify for a VA mortgage if I've had a bankruptcy in the last few years?

Declaring bankruptcy does not disqualify you from a VA home loan.

How does my credit score effect my interest rate?

Although your credit score can effect your interest rate with a conventional loan, it has no bearing on the rate for a VA loan.

Do I have to pay a fee for a VA home loan?

Yes. The VA funding fee is required by law. The fee was established as a way for the veteran who obtains the VA home loan to contribute toward the cost of the benefit. This also reduces the cost to taxpayers. If you are a second time user of your VA status, then the funding fee will be slightly higher. The higher fee for second-time users is based on the idea that these borrowers have already had a chance to use the benefit once. In addition, prior users have had time to accumulate equity or save money.

Can I reduce my funding fee?

A first or second time user who makes a down payment of at least 5% will pay a reduced funding fee of 1.5%.

If I'm a disabled veteran, do I still pay a VA funding fee?

It depends. If you are rated as being 10% disabled, or higher, you will be exempt from paying the VA funding fee. Be sure to inform your lender if you qualify.

Does everyone pay a VA funding fee?

No. If you are rated as being 10% disabled, or higher, you will be exempt from paying the VA funding fee. In addition, a surviving spouse of someone killed in the line of duty or someone that died from an injury sustained in the line of duty, is not required to pay the fee either.

If I use my VA status to purchase a house, do I have to occupy the premises?

Yes. You must certify that you intend to occupy the property as your home. This is the law. This requirement is fulfilled if you actually move in to the house when the loan is closed or within a reasonable time afterward.

If I'm currently on active duty and deployed, can I still qualify for a VA loan?

Yes. In order to qualify, the house must be your spouse's primary residence.

Can a veteran join with a non-veteran who is not a spouse in obtaining a VA loan?

Yes, this can be done, but the guaranty is based only on the veteran’s portion of the loan. Unfortunately the guaranty cannot cover the non-veteran’s part of the loan. Ask your loan officer if they accept applications for this type of joint venture.

What happens if the veteran dies before the home loan is paid off?

In the case of death before the home loan is paid in full, the surviving spouse or any other co-borrower must continue to make the payments. If there is is no co-borrower, the loan becomes the obligation of the veteran's estate.

Does my veteran home loan entitlement have an expiration?

No. Your loan entitlement is a lifetime benefit you are provided for serving your country.

Is it possible to have two VA loans at once?

Generally, no it is not possible. That being said, there are some unusual circumstances where it may be a possibility. Ask your lender.

Will I pay closing costs with a VA loan?

Yes. All VA loans have closing costs. You may be able to obtain a loan where you do not pay lender fees, but you will still have to pay all third party fees and title expenses.

What is the difference between closing costs and pre-paid items?

Closing costs are costs associated with underwriting, attorney fees, title insurance, and any other item associated with setting up your loan. Pre-paid items, though, are costs associated with maintaining your loan. These fees include setting up escrow for taxes and insurance. In addition, any interest your loan will accrue from closing up until the first day of the following month is included in the pre-paid items.

Is there a pre-payment penalty on a VA loan?

No. You can pay off the loan partially or in its entirety at any time without a penalty.

Frequently asked questions about VA loans for refinance

What is a stream line refinance?

A streamline refinance is a mortgage refinancing option strictly for those that used their VA status when obtaining their original mortgage. With a streamline refinance, you can refinance your original mortgage to a lower interest rate with minimal effort and very little or no out-of-pocket expense. In addition, no appraisal is needed and regular underwriting process does not apply so you do not need to send in bank statements, W2s, paychecks, etc.

Can I take cash-out with a VA streamline refinance?

No. You cannot receive any cash at closing, but you can roll in any costs involved with refinancing your loan.

Is the surviving spouse of a deceased veteran eligible for the interest rate reduction refinance loan?

Yes. A surviving spouse who obtained a VA home loan with the veteran prior to his/her death, regardless of the cause of death, may obtain a VA guaranteed interest rate reduction refinance loan.

On a streamline refinance, how much can I borrow?

You can borrow the amount you currently owe on your home without needing to go through an underwriting analysis or get a new appraisal.

Do I need my certificate of eligibility for a streamlined refinance?

No. If you had it when you received your original VA home loan, then you do not need to provide it again when your refinance.

*Based on May 2008 – May 2009 closed loan numbers.