Having your own home is extremely priceless. Year after year, rent becomes more expensive, and if you’re going to spend so much on residential payments, you might as well spend on something that will eventually be yours. While it’s true that homes may be expensive, home loans can always work to our advantage.
What is a VA loan?
Veterans Affairs (VA) home loans are inarguably one the most coveted home loan programs to have ever graced the market. As of this writing, millions and millions of families have been secured homes because of how convenient this type of home loan is. If you don’t already know, a VA loan is exclusive to members of the military and a select few of their spouses.
What Are the VA Home Loan Benefits?
- For starters, what makes this home loan superbly favorable is that it requires none of its borrowers to secure a down payment. Again, none. 0% is needed for a down payment.
- What’s more, where the Federal Housing Administration (FHA) and conventional loans have established mortgage insurances, VA has not. Any eligible member of the armed forces who is extended a VA loan will not have to keep paying for mortgage insurance.
- Additionally, any borrower who feels the need to pass on the loan for whatever reason can choose to do so, as VA loans are assumable.
- Another excellent feature present in this home loan program is that closing costs do not have to be paid for immediately, as these can be included into one’s permanent mortgage, too.
- Furthermore, a VA loan doesn’t require a particular credit rating to be met. Whereas FHA and conventional loans demand FICO scores between the 500 to 640 range as bases, a VA home loan does not.
- To add, VA loans are guaranteed by the U.S. Department of Veterans Affairs, allowing mortgage lenders to offer their customers more agreeable terms.
What Should One Expect in a Veterans Affairs Home Loan?
Although a FICO rating is not demanded from a borrower, it is wise to maintain good credit reports that lead to your trustworthiness as a borrower. Because even if the federal government serves as a guarantor, one will still need to look for a private lending firm to extend the loan, and the best way to do this is to make sure one has a decent enough credit score. Another thing that’s smart to remember is that the U.S. Department of Veterans Affairs only protects mortgages and not the estate; therefore it is essential to make sure the property one is about to purchase is satisfactory for him or her on all levels.
As established, many things about this loan program are beneficial on more levels than average loan perks one can get elsewhere. Still, debtors under a VA are not exempt from certain loan fees and payments. One thing borrowers from other loan programs won’t have to deal with is a Veterans Affairs funding fee. How much this fee varies from profile to profile. Meaning the rate of a funding fee depends on how an applicant is qualified. At the same time, any service member who suffers an ongoing disability will not need to pay for this fee anymore, but the rule with paperwork and documents is similar; one will need to submit particular files depending on how much they qualify for.
Do Military Family Home Loans Have Limits?
Loan limits can vary between counties. In most counties, a borrower can borrow from a few thousand dollars to a little over $400,000. In counties that are labeled high cost, one can get a property in the $600,000 price point. In other words, the maximum amount a home buyer can apply for is determined by a county’s limits.