Some Important Lessons About VA Home Loans And Guidelines

After getting an honorable discharge from U.S military services, can often avail themselves to the awesome benefits of VA loans.

They can take this loan to buy a home or even to refinance a current non VA home loan
A veteran can get a VA loan even to refinance a conventional loan
A VA loan is most often a better choice than conventional loans for a myriad of reasons, whether it is about getting a better interest rate, removing mortgage insurance, or easier qualification
The VA loan option almost always proves to be a better option for an army veteran because it makes more financial sense
Here are some important lessons you need to learn about VA loans
These lessons were explained by an army veteran, who himself has taken a VA Home loans already about 3 different times

Some Important Lessons About VA Home Loans And Role Of VA

The key thing you need to learn about VA loans is that Department of Veteran affairs do not actually issue VA home loans.

Instead, the VA only provides insurance to the lenders who sell VA loans, like a lot of other mortgage (for example FHA)
VA also does not keep check on the loans to make sure that there is nothing fishy going on from the lender, it does not dictate or determine the interest rate and any type of necessary or unnecessary fees being charged on the loan
In simple words, if there is any misconception that VA provides the safeguard to a veteran borrower from getting cheated by some dishonorable loan lender, that is not the case
However, once the loan is closed, the VA do checks for loan quality after closing, but the borrower must ensure that he or she works with an authentic and honest mortgage company
Like any other loan, veterans should compare mortgage rates and lender fees, check reviews about a mortgage company/loan officer and work with lenders that are recommended by relatives and friends

Some Important Lessons About VA Home Loans And Interest Rates

VA does not determine the interest rates or mortgage fees on the VA loans.

Instead, interest rates or mortgage fees is set by financial markets and lenders
As it was mentioned earlier VA only provides insurance to the lenders, in case a borrower fails to pay the loans
The insurance given by VA makes it easy for the veteran to qualify for the loan
However, VA cannot help the borrower with the interest rates
This is because It has nothing to do with mortgage rates and cannot help a veteran who, without knowing, accepts a much higher rate than current market prices
My advice is to make sure you make the best possible choice
Compare the grades of good faith Estimates (GFEs) for different banks or mortgage lending companies and check the discount points for the proposed interest rate

Some Important Lessons About VA Home Loans On Funding Fee

Veterans must know that they often are required to pay a “Funding fee”, which can be expensive but also can be rolled into the loan.

Funding fees are generally about 2.1% of the loan amount, but can vary from 0 to 3.3% depending on documented disability recognized by the VA and also how many uses of VA benefits
For example, with a mortgage worth $ 200,000, the average funding fee would be $ 4,200, an important part of the total loan amount
In almost all cases, the funding fee can be included in the loan
However, the cash payment option is available at the borrower’s request

Although, any veteran having service related injury disability is exempted from paying the funding fee on VA loan (usually more than 10% disabled).

A veteran having VA-certified disability can get an exemption from paying the funding fee on his/her VA loans
The waiving of funding fee can save a significant chunk of money for a veteran
One good thing about funding fee is that it may be tax deductible
To check your eligibility for this, consult your tax advisor

The more you know, the better you are ready to refinance your home or buy a home with the help of a loan from Department Of Veterans Affairs

To learn more about VA loans or any other type of loans check out my mortgage blog for more useful information on the awesome benefits of VA Home loans

If you have been denied a home loan or have any questions about real estate or mortgage please contact Loan Consultants at 844-275-2007. Just give us a call or text and we will be happy to assist you.