VA Loans: What Should You Know
Have you heard about Veteran Affairs mortgage or better yet VA loans but don’t know what it is? If your answer is yes, read on!
In this post, we will be sharing everything that you must know about VA loans. Particularly, if you are a veteran and looking for financing to purchase your dream house, you’re at the right place!
So what is a VA or Veteran Affairs loan?
Well, VA loans are actually home loans that are available for veterans, regardless of the arm force branch they belong to.
These loans are guaranteed by the US Department of Veteran Affairs – which is where this acronym comes from.
These loans are available to both active military members as well as military veterans. Such loans do not necessarily require a down payment. They are made through various private lenders and guaranteed by the Veteran Affairs partially and if the guidelines are met.
Benefits of Acquiring VA Loan
Loans which are guaranteed by Veteran Affairs can easily be received without any down payment. Also, a VA loan does not need mortgage insurance, unlike FHA loans or conventional loans.
This benefit of VA loan translates into huge monthly savings for the borrowers. For example, if a borrower is making around 3.5% down payment in terms of $200,000 mortgage (FHA-insured), he/she is paying $100/month just for mortgage insurance alone.
This means that with a Veteran Affair loan you don’t need to save all the money that you would save for an FHA or conventional loan.
Some Other Factors to Know about Veteran Affairs or VA Loan
The best aspect of a VA loan is that you can utilize the full VA entitlement again and again after you are pay off your loan amount each time. Also, you remain entitled to another Veteran Affair loan even if you you’ve lost one to foreclosure.
Valid for Particular Types of Home
The VA loan mortgage is designed for houses or properties that are in ‘move-in ready’ condition. So if you are planning to buy a downtown deli, a working farm or a fixer-upper, this loan will not work for you. But you can obtain this loan for condos, single-family homes, multi-unit properties, modular housing and more.
A Mandatory Fee
As we stated there is no mortgage insurance linked to VA loans, but you must pay a VA funding fee. The funding fee assists Veteran Affairs to keep running the program and is needed for both refinance and purchase loans. This fee can roll into the amount of loan and may get waived (completely) for veterans who suffer from service connected disabilities.
No Prepayment Penalty
With VA loans you can make additional payments as per your choice and at any time, saving you the interest among the period of your loan. Some veterans structure their payments to deduct little extra automatically each month.
Nonetheless, a VA loan is a great financial deal for former and current members of the armed forces. So if you need detailed information about Veteran Affairs mortgage, take the assistance of an experienced realtor like Ryan De La Uz. Visit our blog for additional topics and more information on VA loans.