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VA Loans Offer Easier Qualifying
VA mortgages are guaranteed by the U.S. Department of Veteran Affairs (VA) and are made available to eligible veterans for either purchasing or refinancing a home. The VA’s guaranty of the loan means the lender is protected against loss if the veteran borrower fails to repay the mortgage.
The ability to buy a home without a down payment is the main attraction of a VA mortgage, and, in most cases, no down payment is required. However, the VA does require a down payment if the mortgage amount surpasses the VA’s current upper limits. In addition, the veteran borrower usually will save considerably on closing costs because the VA refuses to let the veteran pay many fees that are normally associated with taking out a mortgage.
Because the VA eligibility requirements are somewhat complicated, the veteran should contact the VA directly to determine eligibility for VA home financing.
Although no mortgage insurance is required, the VA does charge the veteran a funding fee, which may be paid in cash by either the buyer or the seller or may be financed into the mortgage balance, which is the most common practice.
Other benefits of a VA loan include:
- Interest rates are negotiable and determined by market forces.
- Closing costs are usually considerably lower than other types of mortgages.
- There is no private mortgage insurance requirement.
- VA loans have no pre-payment penalty.
- The mortgage can be assumed by a qualified buyer upon resale.
- Easier qualifying for veteran borrowers.
The veteran borrower must submit proof of service in the armed forces to obtain a Certificate of Eligibility for VA home loan benefits. The certificate must then be presented to the lender to document qualification for the loan.
Although a veteran and a non-veteran can buy a home together with VA guaranteed financing, a down payment is required unless the non-veteran is the veteran’s spouse.
If you want to determine whether you are eligible to get a VA mortgage, go to Mortgage Marketing Associates and let Bob Roscoe make a determination for you.
