Benefits in VA Home Loans
When it comes to qualifying for a mortgage, there are many different types of programs. With the many different mortgage programs available, it is important to choose the best program for your particular home mortgage loan needs.
One of the mortgage programs you can choose from is a VA Home Loan. This type of program is designed for veterans to purchase a primary residence or refinance an existing mortgage home loan. Below are the many benefits to the VA home mortgage loans.
No Down Payment
A VA mortgage loan offers veteran buyers a program with a zero down payment. This means the loan will equal the sales price or the appraised value of the home. The VA mortgage loan program permits veterans with qualifying income and credit to acquire a home without a down payment towards the sales price of the home. On the other hand, Veterans do need money towards closing costs, which the seller can assist the buyer with.
Seller Paid Closing Cost
VA home loans allow the seller to contribute up to 4% towards the buyers closing costs. This is exceptionally important in helping a veteran purchase a new home and reducing the funds needed for closing. For example, if a buyer purchases a home for $200,000 the seller can contribute $8000 towards the buyers closing costs. Seller concessions can pay pre-paid items, title fees, lender fees as well as the VA funding fee. The veteran is not allowed to pay for the termite report, which is generally paid by the seller.
Lower Rates
For many veterans, VA mortgage loans offer the most competitive rates. VA home mortgage rates are not tied to the credit scores the way conventional home mortgage rates are. For example, if a client has a credit score of 660, on a VA home mortgage loan the rate would be the same if their credit score was 780. However, on a conventional mortgage home loan, the credit score of 660 compared to a 780 would see a higher interest rate.
Mortgage Insurance
Another important benefit in the VA mortgage loan program is there is no Mortgage Insurance. Unlike Conventional mortgage home loans and FHA mortgage loans, VA mortgage loans do not charge monthly mortgage insurance. This is an average savings of anywhere between $30 a month to $200 a month, depending on the size of the home loan.
Home Mortgage Loan Size
VA mortgage home loans do have a set loan limit. To determine the loan limit in your area, contact your home mortgage officer. For example, the Dallas – Fort Worth area VA loan limits are $417,000
With many different types of mortgage home loans, it is important to understand all your options. For a veteran, VA home loans are a great way to purchase or refinance a home. It is always important to understand the benefits of each mortgage home loan program that you qualify for and to make sure you are getting the best possible home mortgage. Consult a home loan advisor to see which program is best for you!
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