When it comes to applying for a mortgage loan, there are many different types of programs. With the many different mortgage loan programs available, it is important to choose the best program for your particular home mortgage 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 home mortgage loan. Below are the many benefits to the VA mortgage home loans.
No Down Payment
A VA mortgage home 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 home mortgage 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 property and reducing the funds needed for closing. For example, if a buyer purchases a house for $100,000 the seller can contribute $4000 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.
Reduce Rates
For many veterans, VA mortgages offer the most competitive rates. VA home loan 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 mortgage home loan the rate would be the same if their credit score was 780. However, on a conventional mortgage, the credit score of 660 compared to a 780 would see an increase in the rate.
Mortgage Insurance
Another important benefit in the VA mortgage home loan program is there is no Mortgage Insurance. Unlike Conventional mortgages and FHA home mortgage loans, VA home 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 mortgage.
Mortgage Loan Size
VA home mortgage loans do have a set loan limit. To determine the loan limit in your area, contact your 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 mortgage loans are a great way to purchase or refinance a home. It is always important to understand the benefits of each home mortgage program that you qualify for and to make sure you are getting the best possible home loan. Consult a home loan officer to see which program is best for you!
