A 3rd party broker that specializes in mortgages guaranteed by the US government

Are VA Loans The Best Financing Option?

va loans are best optionAccording to the Census Bureau’s 2013 survey of American Communities, the homeownership rate of households headed by veterans is 79 percent, significantly higher than the rate of civilian headed households which is only 63 percent. The obvious correlation with veteran homeownership trends is the accessibility of the VA home loan program. Recently it was announced that the Department of Veterans Affairs had guaranteed its 20 millionth mortgage. Currently, there are nearly two-million active mortgages propped up via the VA loan. Thirteen percent of 22 million veterans have used the benefit, with many more expected to use it in the coming years.

VA loans provide an affordable alternative to conventional loans for those who qualify. The VA home loan program offers easy access to financing and unlike almost every other available loan program, there is no down payment required. In addition to this, VA loans provide a surplus of additional advantages.

Provided to veterans who meet certain requirements; eligibility for the loan is limited to active-duty service members, reservists meeting length of duty requirements, spouses of military service members who have died as a result of their service and members of the Public Health Service.

VA loans ensure that the recipient will receive the best deal possible on their new home purchase. Before a VA loan approval, the property up for purchase must be inspected and approved by a VA approved appraiser. This ensures that the home a borrower invests in is a comfortable and safe environment for service members and their families to live. Furthermore, this provides an assurance that the loan user will not get ripped off on the true value of the home.

Another important benefit of VA loans is that you can request that the seller pay for some or all of the closing costs involved in the purchase of the home. Closing costs are miscellaneous fees charged by different corporate and federal entities that contributed to the overall purchase of your home. These entities include the lender, the title company, the surveyor, the local government offices, first mortgage payment and more. The amount of the closing cost varies depending on the price of the house but could fall anywhere between one to six percent of the price of the home. These costs usually fall more within a two to three percent range, but can still serve as a major dent in your bank account, avoidable through utilizing VA loans. In fact, you can request that the seller pay up to 6 percent for the buyers costs and fees. If the buyers agent can negotiate this, the buyer should not have to pay any closing costs.

Another important aspect of VA home loans is that the loan is guaranteed against lender’s loss. The lending company will receive their money back in the event that a buyer defaults on the loan.

Because lenders are protected from default, the Department of Veterans Affairs has not established a minimum credit score needed to qualify for the loan program. It has been previously estimated that eighty percent of VA borrowers would be unable on the basis of underwriting standards to qualify for conventional loans. This makes the loan program ideal for borrowers with poor credit. Moreover, the applicant will generally only have their previous 12 months of history reviewed. It is important however to keep in mind that numerous lenders have their own approval guidelines, just because the VA loan does not have a set credit guideline does not mean lenders will be willing to work with applicants with a history of not paying their bills on time.

Choosing to take out a VA loan means that the borrower will not be subject to a prepayment penalty. Prepayment penalties are provisions of your contract with the lender that requires a penalty payment even after your loan is entirely paid off. These are usually from a build-up of interest or expressed as percentages of the outstanding balance when the repayment takes place.

VA loans also feature a non-adjustable fixed interest rate.

Choosing to take out a VA loan is one of the best financial decisions you can make for you and your family. This is obvious when comparing the advantages of these loans to other loans.

To apply for a VA loan, use this link.