When it comes to applying for a home mortgage, 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 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 loans.
No Down Payment
A VA home mortgage 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 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 amount of money needed for closing. For example, if a buyer purchases a property for $150,000 the seller can contribute $6000 towards the buyers closing costs. Seller concessions can pay pre-paid items, title fees, mortgage company 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 mortgages offer the most competitive rates. VA home mortgage rates are not tied to the credit scores the way conventional mortgage rates are. For example, if a client has a credit score of 660, on a VA home mortgage 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 home mortgage loan program is there is no Mortgage Insurance. Unlike Conventional mortgages 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.
Mortgage Home Loan Size
VA home mortgages do have a set loan limit. To determine the loan limit in your area, contact your home loan professional. 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 mortgage loan program that you qualify for and to make sure you are getting the best possible mortgage. Consult a mortgage banker to see which program is best for you!
David White is a Senior Loan Consultant who specializes in VA Home Loans. Begin the VA Home Loan process today.
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