VA LOANS
Mortgage Insurance is a cuss word to most who have come across it's payment increasing powers. Being a Loan Officer, I would have to agree with that.
Luckily, there is a magical loan out there for all of our veterans that can counteract it's evil. It's called a VA Loan and it allows you to borrower up to 100% of the value of the home with, get this, NO mortgage insurance.
With the thousands of brave military men and women that have and are currently serving our country, there are more and more veterans becoming eligible to utilize this amazing loan product to purchase a home. The VA Loan has some amazing features built right in that will not only be very beneficial at the time of purchase, but will be available down the road in cases of refinance or selling the property.
Here are a few of the great features a VA Loan offers over Conventional financing:
1. 100% Financing available: You can borrower up to 100% of the purchase price of the property, so in a lot of cases, you won't have to bring a cent to the closing.
2. No Monthly Mortgage Insurance: On Conventional loans if you don't bring in at least 20% cash to the closing you will be charged monthly mortgage insurance and FHA products always have MI. Monthly mortgage insurance, sometimes called PMI or MIP, is an added payment the lender will charge that insures the bank in case of default on the loan. It does not benefit you at all, it's just added expense each month that you don't want to pay, and with a VA Loan, you won't!
3. Better Interest Rates: For the most part, you'll find better rates and lender credit available to you compared to a Conventional Loan. Qualification becnhmarks like credit score to play a factor, but all things being equal, you'll most likely end up with a better rate and lower fees on a VA Loan than a Conventional.
4. Easier to Qualify for: Generally, it's easier to qualify for a VA Loan over any other type of loan out there. The VA and most lenders will allow for lower minimum credit scores and higher debt-to-income ratios than both Conventional and FHA loans. Nice, huh?
5. Assumability: VA Loans are assumable by other veterans and, in some cases, by civilians. This means that if you get into a VA loan today at a very low rate and decide to sell your home in 5 years and the rates are much higher then, you can allow someone buying your home to take over your VA Loan at the same rate and payment you have on the VA Loan, as long as they qualify. That is a great selling point if rates are higher when you sell the property.
These are just a few of many benefits to using VA Loans over other financing options. I will be writing another post with more features and benefits soon.
If you have a client looking into financing options and they are eligible for a VA Loan, but are not familiar with VA Loans or sure where to start feel free to give me a call. I'd be happy to give you any info on this great loan program and how it compares to the others out there. Don't hesitate to give me a call or shoot me an email.
Comments(0)