Useful information that service members need to know about VA Loans:
Your VA loan is reusable. You can use your full VA entitlement over and over again as long as you pay off the previous loan each time.
VA loans are for Owner Occupants on primary residences only. Since VA loans are for primary residences, The property must be ready for occupancy, not a home needing rehab work. Veterans looking to purchase investment property, fix-up property or vacation homes will have to let us know what their goals are and we will advise you on loan programs available.
They’re not issued by the VA. The VA isn’t in the business of issuing home loans. Instead, the agency provides a guaranty on each qualified mortgage loan.
Guaranteed by the government. If you have a VA entitlement, the agency guarantees up to a quarter of the loan amount. The guaranty gives lenders confidence and helps service members to secure great terms and rates.
Are they available after foreclosure or bankruptcy. Service members with a bankruptcy in their history or whom lost a home to foreclosure can secure a VA loan. Even borrowers who have had a VA loan foreclosed on can still utilize their home loan benefit.
VA loans do come with a mandatory fee. All those great benefits come with a cost: the VA Funding Fee. This fee (usually about 2 percent of the loan amount) helps the VA keep the program going and is required on both purchase and refinance loans. It can be rolled into the loan amount or may be waived entirely for those with service-connected disabilities.
They do have restrictions on who can be a co-borrower. Some loan programs have few restrictions as to who can be a co-borrower. That’s not the case with the VA loan program. The only acceptable co-borrower is your spouse or another eligible veteran who will live in the home with you.
The BIG advantage of a VA loan is that they don’t require mortgage insurance. Mortgage insurance is a monthly fee borrowers of other programs pay but not required on a VA loan. For instance, an FHA loan requires 1.35% of the annual loan amount to be paid as mortgage insurance. This is on top of the principal and interest payment and is due for the life of the loan. For example an FHA loan with a balance of $250,000 would likely have a monthly mortgage insurance payment of more than $200. This is a huge savings to the Veteran and may allow the Veteran to purchase in a higher price range than borrowers using other loan programs.
Conventional loans typically charge mortgage insurance on loans where the borrower is putting less than 20 percent down. For Instance, a $250,000 purchase would typically call for $50,000 as down payment to avoid either up front or monthly mortgage insurance.
The VA’s guaranty eliminates the need for any mortgage insurance or mortgage insurance premium, helping borrowers save even more money each month.
They don’t have a prepayment penalty. You can make extra payments any time you want, saving large amounts in interest over the life of your loan. You can even structure your payments to automatically deduct a little extra every month. Just an extra $100 per month can shave years and tens of thousands of dollars from the balance.
Would you like to get Pre-Approved?
Take just a moment and email me for a Quick Application. I will let you know how much you qualify for–then you can start working with the Realtor.
Are you a Veteran? CLICK HERE
“Mortgage Monster … or Mortgage Mastermind?”
Cornerstone Home Lending, Inc. Branch NMLS # 1224262
Todd McManigal 505-918-1028 NMLS # 267557