An educated consumer is always the best defense to ensure you get the best deal possible. If you are not in the mortgage business, there are some terms you may not know. In VA Mortgage Lending there are words and phrases that you need to know. By having knowledge of the mortgage process, you are better equipped to ask appropriate questions that can result in saving money. Below is a list of Today VA Loan Terms to know.
VA Loan Terms to Know:
COE : This stand for “Certificate of Eligibility.” Before getting a VA Mortgage you will need to obtain a C.O.E.. If you do not already have one, you can check your status or start the process here.
CRV: CRV stands for “Certificate of Reasonable Value.” This document comes to from the Veterans Administration and is based upon an appraisal. The CRV will establish what the maximum loan amount will be.
Eligibility: In order to get a VA Loan you must meet the eligibility requirements. Once eligibility has been determined then it is time to see what you can qualify for.
Funding Fee: The funding Fee is a fee that is charged at the beginning of the loan. Since VA Loans carry no PMI and require little or no down payment, this funding fee is used to offset those costs to the administration. One benefit of the funding fee is that it can be financed into a loan and does not have to be paid, out of pocket.
The funding fee percentage is based upon many factors, including the type of veteran, amount of down payment, and type of refinancing; IRRRL loan, Cash-Out Refinance, or purchase. The funding fees range from .5% to 3.3%. To find out exactly where your funding fee would fall, ask one of our VA Mortgage specialists.
G.I. Bill: The G.I. Bill was enacted by congress in 1944 which gave returning veterans a wide range of benefits from tuition assistance to low-cost, low-down-payment mortgages. Since the program started there have been more than 20 million VA Mortgages guaranteed by the Veterans Administration!
IRRRL: Stands for Interest Rate Reduction Refinancing Loan. Loan name for a streamlined refinance. This a non-cash-out refinance of a VA Loan that usually requires no appraisal and no underwriting. To find out more about how much you could save with an IRRRL, click here.
VA Streamline Refinance: This is the same as above, also called an IRRRL
Veterans Administration: The United States Department of Veterans Affairs, or VA for short, is a government-run benefit system for our veterans. They provide a myriad of services from medical care to farm loans. For a complete list of services offered, connect to the VA directly.
VA Guaranteed Loan: The VA does not issue or make loans, they provide a guarantee to those that make the loans. Much like an insurance policy to the lending institution. Because the bank knows that the loan is guaranteed by the VA, they are able to offer more attractive terms and relaxed lending guidelines when offering VA mortgages. This results in lower rates and more savings for our veterans. To see how much you can save by getting a VA Loan, see if you ending qualify now!