Saturday, November 2, 2013
VA Mortgage Loans - 100% Home Financing Options For Veterans
Veterans can obtain cost-effective home financing with VA mortgage loans that enable purchasing and refinancing up to 100% loan to value. In order for veterans to qualify and benefit from VA home loans it is important to understand the loan eligibility requirements, the VA entitlement and various loan types allowed with VA mortgages. Clearly, military veterans should understand the differences, advantages and disadvantges when comparing VA mortgage loans to conforming home loans.First and foremost, VA is not a mortgage lender. The Department of Veterans Affairs does not make loans, but VA does guaranty the VA mortgage loans that traditional lenders make. The Veteran Administration does provide any lending services but they do guarantee that the qualified vets repay of the loan or they will pay the insurance portion of the mortgage that poses the most significant risk for mortgage lenders. Because of the government guarantee reduces the risk of payment default, vets can benefit from low interest rates whether they are buying or refinancing a home.When applying for a VA loan you must have your certificate of eligibility and the VA mortgage lender will likely access your credit report and request income documentation like pay-stubs and W2's.There is an automated certificate of eligibility that enables borrowers or lenders to access when submitting a VA mortgage Loan into process. The Veterans Affairs Dept. recommends working with a credit counselor in an effort to repair your credit if needed. Like FHA loans, VA mortgage loans are more flexible and understanding with credit. Credit scores are not the driving factor for VA qualifications, but income and debt to income ratios are important factors for getting a VA loan approved. The VA guaranty is only available if your income and monthly expenses suggest that you can afford a new home loan.The most obvious advantage with VA mortgage loans is that they are offered up to 100% loan to value for buying or refinancing. That means you will not be required to put money down in a purchase transaction or need any equity to refinance for a better mortgage payment. Again, No down payments are needed if you can get approved for a VA mortgage loan. Since there is a government guarantee to the mortgage lender provided by the VA, additional private mortgage insurance is not required. The VA mortgage rates are low with 30-year fixed interest rates and the VA funding fee is only.5%.