What is a Colorado VA Loan?
The VA home loan program is a government-backed mortgage offered by the Department of Veterans Affairs (VA). Although private lenders administer the mortgages, the VA guarantees to repay a portion of the loan if the borrower defaults. This means that military service members and their spouses can enjoy convenient and affordable loan programs with great interest rates.
How Do VA Loans Work in Colorado?
To get started, active-duty service members and veterans must confirm that they meet the eligibility requirements, including serving a minimum amount of time in the armed forces or National Guard and receiving an honorable discharge.
Once this is complete, you’ll contact a VA-approved lender. Not every company is contracted to work with the VA, but Arnaiz Mortgage is proud to help veterans take advantage of their VA home loan benefit. After you fill out your application, we will guide you through the home appraisal, underwriting, and loan closing so you feel confident about your mortgage.
Colorado VA Loan Benefits
VA home loans are the best loans for military benefits due to their flexibility and affordability. Some of the many benefits include:
- $0 down payment
- No ongoing mortgage insurance, just a one-time VA funding fee
- Lower interest rates
- Flexible qualification, including credit scores
- Streamlined refinance loan options
- Limited closing costs
A VA loan can also be a powerful marketing tool when you’re ready to sell, as a new owner can assume the existing VA loan even if they don’t have military service.
See today’s mortgage rates in less than 60 seconds
Get a quoteColorado VA Loan Requirements
The VA home loan program has lower credit requirements than other loan products, such as conventional loans, making it easier to qualify. Basic requirements include:
- Eligible service history
- Certificate of Eligibility (COE) from the VA
- Home must be a primary residence
- At least 500 credit score
- Adequate residual income to afford monthly payments
If you are a surviving spouse wishing to secure a VA home loan, you must prove that your late partner died in combat or due to a service-related disability.
Colorado VA Loan Limits
If this is your first purchase loan with the VA, then you have full entitlement, meaning that there is no loan limit. However, if you have an existing mortgage with the VA, you will have a loan limit.
In most Colorado counties, the maximum loan amount is $806,500. However, high-priced counties like Eagle County, Garfield County, and Pitkin County have higher limits of $1,209,750. You can check the loan limits for all Colorado counties at the Department of Veterans Affairs website.
VA Loan Entitlement in Colorado
Your Certificate of Eligibility (COE) will state whether you have a full or partial entitlement. Full entitlement means that you do not have an existing VA home loan, and you can purchase any Colorado property you can afford.
Those who already have a VA loan or defaulted on a previous VA mortgage will have a partial entitlement, meaning they can only borrow up to the county loan limit. This may mean that if you want to buy a more expensive home, you have to provide a down payment.
Most Colorado counties have a limit of $806,500. While this doesn’t mean you cannot buy a more expensive home, you will have to provide a down payment that covers these additional costs.
For example, let’s assume you want to buy a $1,000,000 home in Colorado Springs but have a prior mortgage with the Department of Veterans Affairs. The El Paso county limit is $806,500, meaning that you would have to make up the difference with a $193,500 down payment.
Colorado VA Interest Rates
VA home loans are government-backed, which means the VA will reimburse the lender for part of the loan payments if the borrower defaults. Because of this, qualified borrowers can enjoy lower mortgage rates than for other loan products.
Your rate will be based on your credit score, loan amount, and lender. Right now, the VA rate in Colorado is around 6.63%, which is significantly better than the conventional loan rate of 6.86%.
Types of VA Loan Programs in Colorado
The VA program offers a full suite of loan types for active service members and veterans. These include:
- VA Purchase Loan: Buy your Colorado dream home by leveraging the VA guarantee. These offer great rates and no private mortgage insurance.
- VA Interest Rate Reduction Refinance Loan (IRRRL): Also called a streamline refinance, you do not need to go through a second VA appraisal or update your income information.
- VA Cash-Out Refinance:
- Native American Direct Loan: If you are a registered member of a Native American tribe, you can get a loan to purchase, build, or renovate property on federally recognized tribal land.
How to Qualify for a VA Loan in Colorado?
Our team makes VA home loans quick and easy to secure. These are the primary steps you can expect when you work with our experienced mortgage officers.
- Determine Eligibility: You will need to apply for a Certificate of Eligibility from the Department of Veterans Affairs, which can be completed on its website. This confirms that you have the requisite military service and shows whether you have full VA entitlement.
- Speak to a Mortgage Officer: Thanks to our local expertise, we can help you determine what loan products will work best for you. We’ll also run a credit check to explore your borrowing power and then discuss the next steps of the process.
- Get Preapproved: Pre-approval is a powerful way to show sellers that you’re serious about purchasing. You’ll provide your COE, proof of identity, credit score, and tax information. We will quickly process your form and explain how much you may be eligible for. Being preapproved does not mean that you’re guaranteed a loan, but it will make it easier to apply.
- Work With a Realtor: The house hunt is the most exciting part of the home-buying process. Partner with a realtor who can lend their local experience, ensuring you find the perfect property for your needs.
- VA Appraisal: VA home loans require that the property be assessed by a VA appraiser. Rather than just determining property value, this also ensures that the home meets the VA’s strict standards for safety and habitability. For example, the appraiser will check that there’s running water, working windows, and sanitation systems. They will also look for common hazards, like wood-destroying insect infestations or lead pipes.
- Underwriting and Closing Day: You will submit your formal application to the underwriting team, who will double-check everything. Elements reviewed here include your financial information, property attributes, and home value. If the loan is approved, you’ll choose the closing date and sign the paperwork. You’ll also pay closing costs, such as property taxes in escrow and underwriting fees.
