VA Loans May Be A Good Idea
Were you in the armed forces? Are you looking to buy a house? Veterans will qualify for special loans. Here are some things to consider about VA loans.
Were you in the armed forces? Are you looking to buy a house? Veterans will qualify for special loans. Here are some things to consider about VA loans.
Refinance or purchasing
You can buy a house with a VA mortgage loan. Did you know that you can refinance your current VA mortgage? You can get ninety percent of your original loan amount.
Streamline refinance
You can get a fast and simple refinance with a streamline loan. There may not be many papers to sign. Things like credit checks and appraisals may not be needed. This will lower your current VA mortgage interest. You can also take equity out.
VA ARM loans
You can get an adjustable rate VA loan. The interest will be fixed for a few years. Then it cannot be raised more than five percent.
How do these loans work?
Service people and ex service people may qualify for a special loan program. The U. S. Government will guarantee part of your home loan. This part is called an entitlement. The entitlement amount cannot exceed $60,000. This is for homes in excess of $144,000. For homes under that amount, the entitlement is $36,000. This amount will vary, according the loan value. An entitlement is not money paid to the veteran. Also do not forget your certificate of eligibility. You get this from the VA office. You lender may be able to get it for you.
pros of VA home loans
You may not have to come up with down money. Some loan companies may want as much as twenty percent for a conventional loan. This can make a big difference.
You will not have to pay PMI. This is private mortgage insurance. You are financing a house with less than twenty percent down. Lenders want to be compensated for the added risk. You will need to pay a private mortgage insurance premium. This will be added to your house payment. You will pay this until your loan principle is twenty percent of your original loan amount. Your VA loan will have a lower monthly payment without PMI.
You will not have to pay any prepayment penalties. Sometimes you will have to pay extra if you pay a loan off too soon. This is not the case with these types of mortgages.
It may be much easier to qualify for your home loan. Lenders will also let the seller pay all of your closing costs. This can get you into a house with virtually no out of pocket expenses.
Not so good
Lenders will often ask the seller to pay your closing costs. Some sellers may not wish to take a cut in their profit. They are under no obligation to pay your closing costs. This may or may not have an effect on your purchase.
VA mortgage loans may take longer to process and complete. This may make some sellers hesitant to do business with you.
When your loan closes, you will owe a funding fee. It may be two percent or more of your loan amount. You can finance the funding fee in most cases.
Conclusion
VA loans are not just to purchase a home. You have several options. Consider everything when you buy. Talk to your lender for more details.
Were you in the armed forces? Are you looking to buy a house? Veterans will qualify for special loans. Here are some things to consider about VA loans.
Refinance or purchasing
You can buy a house with a VA mortgage loan. Did you know that you can refinance your current VA mortgage? You can get ninety percent of your original loan amount.
Streamline refinance
You can get a fast and simple refinance with a streamline loan. There may not be many papers to sign. Things like credit checks and appraisals may not be needed. This will lower your current VA mortgage interest. You can also take equity out.
VA ARM loans
You can get an adjustable rate VA loan. The interest will be fixed for a few years. Then it cannot be raised more than five percent.
How do these loans work?
Service people and ex service people may qualify for a special loan program. The U. S. Government will guarantee part of your home loan. This part is called an entitlement. The entitlement amount cannot exceed $60,000. This is for homes in excess of $144,000. For homes under that amount, the entitlement is $36,000. This amount will vary, according the loan value. An entitlement is not money paid to the veteran. Also do not forget your certificate of eligibility. You get this from the VA office. You lender may be able to get it for you.
pros of VA home loans
You may not have to come up with down money. Some loan companies may want as much as twenty percent for a conventional loan. This can make a big difference.
You will not have to pay PMI. This is private mortgage insurance. You are financing a house with less than twenty percent down. Lenders want to be compensated for the added risk. You will need to pay a private mortgage insurance premium. This will be added to your house payment. You will pay this until your loan principle is twenty percent of your original loan amount. Your VA loan will have a lower monthly payment without PMI.
You will not have to pay any prepayment penalties. Sometimes you will have to pay extra if you pay a loan off too soon. This is not the case with these types of mortgages.
It may be much easier to qualify for your home loan. Lenders will also let the seller pay all of your closing costs. This can get you into a house with virtually no out of pocket expenses.
Not so good
Lenders will often ask the seller to pay your closing costs. Some sellers may not wish to take a cut in their profit. They are under no obligation to pay your closing costs. This may or may not have an effect on your purchase.
VA mortgage loans may take longer to process and complete. This may make some sellers hesitant to do business with you.
When your loan closes, you will owe a funding fee. It may be two percent or more of your loan amount. You can finance the funding fee in most cases.
Conclusion
VA loans are not just to purchase a home. You have several options. Consider everything when you buy. Talk to your lender for more details.
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