What are the Financing Benefits of a VA Loan?
Millions of veterans and service personnel are eligible for VA financing benefits. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.
Be sure to consider some of the advantages of VA home loan before arranging for a new mortgage to purchase your home.
The most important benefit is that no down payment is required in most cases.
You may be able to obtain a loan maximum up to 100% of the VA established reasonable value of the property. Due to secondary market requirements, however, loans generally may not exceed $240,000.
Another financing benefit is the flexibility of negotiating interest rates with the lender.
There is no monthly mortgage insurance premium to pay.
There is a limitation on the buyer's closing costs.
An appraisal that informs you of the property’s value.
You have a choice of repayment plans with the thirty year loans such as:
a. Traditional fixed payment (constant principal and interest; increases or decreases may be expected in property taxes and homeowner's insurance coverage);
b. Graduated Payment Mortgage - GPM (low initial payments which gradually rise to a level payment starting in the sixth year); and
c. In some areas, Growing Equity Mortgages - GEM (gradually increasing payments with all of the increase applied to principal, resulting in an early payoff of the loan).
For loans that are for newly constructed houses, the construction is inspected at appropriate stages to ensure compliance with the approved plans, and a 1-year warranty is required from the builder that the house is built in conformity with the approved plans and specifications. In those cases where the builder provides an acceptable 10-year warranty plan, only a final inspection may be required.
An assumable mortgage, subject to VA approval of the assumer's credit.
Right to prepay loan without a prepayment penalty.
VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial difficulties.
If you have any questions on these
financing benefits
for a VA loan, don't hesitate to contact me.
Remember, even for a VA loan you need to make sure to have good credit.
Also if you need down payment assistance, be sure to check out grants for your state or our down payment assistance pages. They have lots of information to help you.
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