Finance Press - Daily financial articles from world

Are you getting ready to buy a house? Maybe you were in the armed forces. VA loans offer many advantages. You can also find several choices.

Are you getting ready to buy a house? Maybe you were in the armed forces. VA loans offer many advantages. You can also find several choices.

Refinance or purchasing

Aside from the usual home purchase, you can refinance. It you have a current VA loan, you can refinance ninety percent of the value.

Streamline refinance

You can get a fast and simple refinance with a streamline loan. There may not be many papers to sign. Things like credit checks and appraisals may not be needed. This will lower your current VA mortgage interest. You can also take equity out.

VA ARM loans

VA adjustable rate loans are available. They have an interest cap of five percent. The first few years, there will be no interest raises.

What are VA mortgages?

Lending institutions will offer special loans to qualifying veterans. The United States government will guarantee a portion of the loan. That amount is referred to as the entitlement. The maximum amount that the government will assure is $60,000. This is for home loans over $144,000. For houses under that amount, the figure is $36,000. It will vary depending on the loan amount. The entitlement is the amount that the government will pay the lender if you default. You must also procure a certificate of eligibility from the Veterans Administration. In some cases, the loan company can do that for you.

Advantages to VA mortgages

You can get a VA loan with no money down. This is a huge advantage. Conventional loans will sometimes want a twenty percent down payment.

No PMI means a lower monthly payment. PMI is private mortgage insurance. Lenders charge this fee for smaller down payments. Usually if you pay down, less than twenty percent, you will pay for PMI. This is added to your total cost. With other loans, you pay PMI until twenty percent of your loan is paid.

You will not have to pay any prepayment penalties. Sometimes you will have to pay extra if you pay a loan off too soon. This is not the case with these types of mortgages.

You may find it simpler and easier to qualify for a VA loan. You may also not have to pay any closing costs. The seller can pay them all for you. This will help keep your final costs to a minimum.

Cons

Many times the lender will ask the seller to pay all closing costs. However, they may not accept.

VA mortgages might take a longer time to close. Some people may not want to wait, to sell their house. You could miss out on some opportunities.

You will have to pay a funding fee on your loan. When it closes, your fee can be two percent or more of the loan amount. This can be added to your loan.

In closing

VA loans can serve many purposes. Take all of the choices into consideration. Talk to a lender to get more details.

< Prev		Next >