Surprisingly there are a lot of Veterans that are not aware of the actual benefits they are allotted by the VA. My husband is a Veteran of Desert Storm, and after all of this time he is finally using the benefits he gets Free from the veterans administration. So I thought I would spread the word to all Veterans out there and try to make you all aware of what you should be taking advantage of, since you did make sacrifices and serve our country.
First of all, did you contribute to the GI Bill when you were enlisted? This is one of the best benefits of being a veteran, or a service member in general. My husband contributed and now he gets $1075.00 per month of full time enrollment to use toward school. Of course he still has to take out student loans since this amount would not cover the entire price of tuition, but boy does it help out a lot! Even if you attend school ¾ or part time, you still get paid through the GI Bill as long as you have satisfactory attendance. I actually attend an online school that consists mostly of service members and veterans. ECPI is a regular technical school or you can go online as well and they are great with helping you use your GI Bill. My husband attends Devry University and they have been very good with using his GI Bill as well. The really great thing is that the VA deposits the amount into your checking account or they can send you a check. So if you paid into the GI Bill and have an honorary discharge, why not use it? Plus there are new benefits available to reservists that were activated for at least 90 days after September 11th. This is called the Reserve Educational Assistance Program or REAP. You can go to the VA website and learn more, if interested. Please remember, there is a time limit to using your GI Bill benefits, so don’t let it slip away!
Another benefit is the VA home loan guarantee program. We just took advantage of this and are in the process of having a home built by M/I and will be closing in January. What’s the difference between using the VA and an FHA loan, which most people use? Well there are so many different benefits of the loan program, you should actually check it out for yourself through the VA site. I’m going to touch on some of the basics, just to give you an idea. The really great thing is that President Bush actually added onto the benefits in June of this year to make it even better. How should you get started? First, read this then check out 2 sites about the VA home loan service. After that you are going to have to show proof of your service and discharge status by showing your DD-214 form. Here is how we went through the process of using the VA service: my husband made sure he had his DD-214 form. Then we decided on having a house built instead of buying an existing house. We then looked at the home builders around the area along with their floor plans and pricing, and decided to go with M/I homes. We found the area we wanted to live and went to the model home center in that community. We met with the new home consultant and got things started once we chose which house we liked. He sat with us and crunched numbers to make sure we could afford the house. He was in the military as well and so he helped us through the process of using the VA loan program.
M/I basically has taken care of everything with the VA. We had to give them the DD-214 form and all of the regular financial information when you go to apply for a mortgage, but they have handled everything else. I think there have been a couple of papers my husband had to sign for the VA along the way, but it was nothing major. So what kind of options does the VA offer? They have a variety of loans, depending on your needs and finances. They do not use your FICA score, but they do check your credit. They also look at your debt-to-income ratio. So don’t think they won’t ask you about outstanding debts on your credit report. If you think there are things that may be “questionable” on your credit, I would try to get a pre-approval first so you’re not in the dark when you go to meet with the finance officer about the loan, and you know how much you can actually afford. I know, this sounds a lot like a regular mortgage. So where is the actual VA advantage? Right here: The VA guarantees a maximum of 25% of a home loan amount up to $104, 250. What does that mean? It means that the lender will be protected against loss if you fail to repay your loan. This means that you are not required to pay a down payment, unlike other loans. The loan limit on the mortgage is $417, 000. There is a funding fee for the VA and it depends on the price of the loan you are requesting. You can pay this fee out of pocket or have it added into your mortgage amount.
What about closing costs? In our situation, we are paying our portion of the regular closing costs. You could possibly have the costs included, but they have to take certain steps to do so. Our costs were far less than paying the VA funding fee or a down payment, so it’s not as much as you think. Now, what is debt-to-income ratio? It’s how they determine if you will actually be able to pay for the house, depending on your current debt and how much money you make. The maximum in order to qualify is 41%. If it exceeds 41% then they have to look at your information and determine if they will still give you a loan. So how do you figure out what your ratio is? Take the total amount of the mortgage payment (including tax and insurance and homeowner’s dues, etc) then add all of your recurring monthly debt (car loans, credit cards, student loans, etc). Divide this amount by your gross monthly income and you will have your percentage. If your ratio is too high, they will look at you more favorably if you have good credit and a long time employment. It seems like a lot to go through, but it’s well worth it. Depending on the lender, they offer a variety of loans, such as 3/1 and 5/1 Arm, or 15 and 30 year fixed. The rates tend to be a little lower as well and you don’t have to deal with points. Plus, if you have trouble paying back your loan, you can call the VA and they have ways of trying to help you if you run into something like losing your job.
So what other benefits are out there? Well it depends on your status and when you were in or are you still on active duty, etc. Some veterans get compensation for injuries or a pension. Some veterans also get to use the life insurance and health insurance plans if they are not able to have these on their own. The VA also has vocational rehabilitation and employment programs. Did you know there are some companies that hire veterans before anyone else? They are in an agreement with our government to do so. As a veteran you also have certain burial options when the time comes. Also, some companies offer discounts to service men and veterans on various products and services. There is so much out there and very little gets used. So why not at least look into things and begin using the benefits you earned by making your personal sacrifice for our country?