Ten VA Home Loan Facts that Most Veterans Are Unaware Of

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Ten VA Home Loan Facts that Most Veterans Are Unaware Of

Today around 21 million plus veterans and service members live in United States. But in the last five years, only 6% of these veterans or service members have bought a house with a VA mortgage. This relationship can be much greater.

Veterans frequently ignore the program as a worthwhile option for a variety of reasons.

First, Veterans may not aware of all the advantages of VA mortgage. Second, Veterans might consider that getting a VA mortgage loan is a difficult process. Also, some lenders do not spend time teaching veterans about VA mortgage loan program. VA Home Loan is a program that is aimed specifically at military home-buyers.

1. VA mortgage loan requires no loan insurance or down payment:

Take some moments to learn these ten truths about the VA mortgage program, and forget almost any other option to buy or finance your home. These are probably the greatest benefits of a VA loan. You do not need to deposit any down payment. Other mortgage programs like FHA and conventional loans, ask for minimum of 3.5% to 5% down payment. When buying a house for $ 250,000, this is $ 12,500.

With a VA loan, you can immediately buy your dream home instead of spending years and waiting for your saving to become large enough to pay for the down payment. With VA mortgage loan, you can also dodge high fees of mortgage insurance. According to the MGIC (private mortgage insurance provider), on a $ 250,000 house, PMI costs $ 150 per month. A potential buyer can afford a home having $ 30,000 extra worth in similar payment per month simply by excluding the Private Mortgage Insurance. The use of a VA loan keeps money and significantly increases purchasing power.

2. A borrower can use VA mortgage benefit repeatedly:

VA mortgage loan is not a one-time facility. You can use it as many times as you want. So,

Let’s say a Veteran bought a house using VA mortgage loan. Now after sometime, they went through the house and now they want a bigger house or something more. If Veteran trade a house and payoff VA loan fully, they can buy another house by re-using this advantage. Veteran’s right for getting VA loan has been completely restored.

However, this is not the only way to reuse its benefits.

Veterans and qualified service persons can obtain a one-time restoration by completely paying off a VA mortgage loan, and still can keep the house. This situation begins when you buy a house a long time ago and completely pay off a VA loan. This also applies if you used a non-VA loan to refinance a VA mortgage loan.

By this, you can stay at your home and also enjoy the advantages of VA home purchasing, once again.

3. VA mortgage advantages never perishes:

Once you get permission for a VA mortgage loan, it will not go away. Those who have served for twenty, thirty or fifty years often question if they can still purchase a house now if they never use VA mortgage benefit. If the permission can be specified, the answer is yes.

Eligibility depends on the duration and period of service time. For example, a veteran of the US military could be eligible if that veteran had at least 90 days of service during Vietnam time.

To verify eligibility, start by requesting Form DD 214. This document allows the VA-approved lender to apply for a VA Eligibility certificate for the borrower, a borrower can also directly order from the VA’s eBenefits website. You may have the right to purchase a house with a VA mortgage, even if you have been in service for a long ago.

4. Surviving Spouses of a Veteran maybe eligible:

More than 3,000 surviving spouses bought a home in 2015 taking VA advantage of their deceased partner. Un-remarried husbands and spouses of deceased service members can buy a house with no down payment or mortgage insurance. In addition, the funding rate of the VA is exempt.

There is no way to compensate the deceased’s husband, but this advantage will certainly help them to move forward after the tragedy.

5. VA mortgage loan have lower interest rates:

Interest rates in the VA mortgage program are usually around 0.25% lesser than conventional mortgage loans. VA supports mortgages, making them less risky for creditors. These savings will be passed on to veterans.

In addition, VA loans are associated with the lowermost foreclosure rate of all types of loans, further reducing the risk for creditors. No wonder, veterans and service staff take ownership of a home very seriously. These features add up to lower interest rates and suitable payments for those who opt for a VA mortgage loan.

6. VA mortgage loans can be taken from local loan lenders:

A VA mortgage loan is given by private companies, not from the government. Instead of Department of Veterans Affairs actually Private banks, credit unions, and mortgage companies take applications or approve the loans or release funds.

VA only insures the lenders. Officially known as the VA guarantee. The VA confirms that the creditor will be compensated if the veteran is no longer able to pay the payments. Lenders, on the other hand, issue loans on easy term. In short, the VA loan offers the best for both borrower and the lender. You can enjoy your benefit, but also can work comfortably and quickly with the lender you have chosen.

7. Refinance, Buy or tap into home equity:

Using a VA mortgage is not just about purchasing homes. Of course, it offers insurmountable advantages when buying a home, but a veteran can also utilize it to refinance their existing loan, whether it is a VA mortgage loan or a non-VA loan.

VA loan home owners can use IRRRL to simply reduce their interest rates and repayment without an appraisal, W2s, paystubs or bank statements. VA streamline refinance gives VA loan borrower a quicker and low-cost way to get lesser refinance interest rates when rates fall.

Refinancing value added, as we know, offers retired creditors (VA) a quicker and inexpensive way to reduce refinancing interest rates when interest rates fall.

Even homeowners not having VA loans can utilize VA refinancing. The VA cash-out is available to veterans who currently do not have a VA mortgage loan. As the name implies, refinancing can be used to convert your home-equity into cash. You are simply borrowing more than you currently owe. The difference will be attributed to you in the end.

The amount of a VA loan can in many cases reach 100% of the value of your home. Use the sales product for any other purpose: home improvement, training or even a new car. At this time, many owners have reduced their interest rates and withdrawn the funds at the same time, while simultaneously achieving two objectives.

However, you do not need to withdraw money to utilize this VA mortgage loan choice. It can also utilize for they repayment of the loan which is not a VA. Qualified homeowners who pay for mortgage insurance or who have other unsolicited loan should consider refinancing with a VA loan. You can eliminate the PMI, take a fixed rate, payoff a second mortgage or simply lower the interest rate to facilitate the homeownership further inexpensive.

8. Soft rules for foreclosure, lesser credit scores, bankruptcy:

Unlike other loan programs, bankruptcy, foreclosure or a lower credit score does not ban you from getting VA mortgage loan.

Meet different lenders because everyone has their own position on past loan issues. However, the VA does not have a lower credit score requirements. This allows lenders to approve loans to a borrower having low credit score. In addition, when you have recognized 2 years of spotless credit following a bankruptcy or foreclosure, V.A. assumes your credit re-established.

In the United States, both military and civilian, many homeowners face bankruptcy and foreclosures due to loss of income, medical emergencies, or unplanned events. Fortunately, these financial difficulties have not prevented VA-eligible buyers from staying in homes.

The exception, however, is a foreclosure including a VA mortgage loan. In this case, you may have to repay the amount associated with the foreclosed VA mortgage loan. But for most homebuyers who have had loan problems in the past, the VA mortgage may be their way to get into a home.

9. Funding fee waivers

Funding fee normally charges by VA is to cover the expense of the mortgage program and make housing bearable for forthcoming Veterans. The funding fee for VA mortgage loan is between 0.50%-3.3% of the total loan amount, contingent on service record and type of the loan.

However Disabled Veterans who are getting the amount as compensation for a service-related disability are excluded from the funding fee. Also, Veterans who have been receiving retirement or on-duty pay but also are qualified for disability compensation, also excluded from funding fee.

10. Purchase a Condo with VA mortgage loan:

Veterans can purchase numerous types of real estate with VA mortgage loan, including a house of four units or a single family home, and even manufactured houses. But condos are often ignored by VA home purchasers.

Condos are perfect houses. Their worth is often lesser than the price of single-family house. In addition, Condos is often the only within your means choice in several cities.

VA preserves a list of permitted residential units. Veterans can look for a condo in condominium search tool by writing city or state or even the condo’s name. This is a very big list. There are more than 1,000 condos available in Texas, 9,000 in California and 2,400 shared apartments in Washington State.

As a veteran or member of the military, consider different types of homes when buying a home.

The previous ten evidences are just a little and there are truly countless reasons to utilize your VA credit. Of course you deserve it. You can also check official website of VA for more detailed information.

The freedom that members of all armies, past and present, give to the country is not easy to repay. However, VA mortgage program is just small way of saying thanks for your great services and shear commitment.

If you have been denied a home loan or have any questions about real estate or mortgage please contact the author, Matt Herbolich, MBA, JD, LLM by phone or text at 786.390.9499 or by email at mherbolich@usa-mortgage.com. Mr Herbolich works when you work, so feel free to contact him any time.

Matthew Herbolich
Matthew Herbolich
Mr. Herbolich is a Senior Loan Officer at USA Mortgage, #NMLS 227262. He is an expert not only in lending but multiple facets of real estate, particularly the title industry. Matt trains his fellow loan officers on title industry topics, real estate investing, and countless mortgage guidelines. Have any questions? Call at 888-900-1020 or send email to: mherbolich@usa-mortgage.com

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