There is no doubt in that for almost every military borrowers VA Loans have proven to be one of the most popular and powerful lending program available in the market as there is the benefit of excellent VA mortgage rates. This very lending program has helped nearly 22 million service member to become homeowners. If you are planning to apply for one, then you should consider using VA mortgage calculator in order to gain an understanding of how much your payments will be. Though VA loans are designed for service members, you will be surprised to know that not every VA borrower is familiar with the quirks and benefits of this option. VA loan process is quite similar to the loan process of a normal loan, but there are a number of things related to VA mortgages that many real estate agents and potential borrowers don’t know about.
Below are the important things that service member should know about VA Loans:
VA Loans are reusable
Yeah, you heard it right. You can use this option again and again as long as you pay the previous loan. However, there might be a chance of getting VA loan even when you currently have one or have lost one to foreclosure.
You can buy only certain types of home with VA loans
Know this act that if you are planning to apply for VA loan for buying a downtown deli, fixer-upper, or a working farm, you might be disappointed. VA loans are designed specifically for the properties with “move-in ready” condition, which includes condos, single family homes, multi-unit properties, modular housing and more.
For primary residences only
Never even try using VA loans for buying a vacation home or investment property, although you can use it for buying multiunit property provided if you live in one of the units.
VA doesn’t issue you home loans
You should know this fact that VA isn’t in the one in the business of issuing home loans. They only offer guaranty on every mortgage loan that qualifies.
VA loans are guaranteed by the government
In case if you have a VA entitlement, then you should know that the VA guarantees up to a quarter of the total loan amount. This very guarantee gives lenders confidence over repayment and helps you and other service members to secure home loans at best VA mortgage rates and terms.
Is available for service member even with bankruptcy or foreclosure
Even service members with a history of foreclosure or bankruptcy can easily qualify for VA loan. Even borrowers who in the past had a VA loan foreclosed can utilize VA loan benefits.
VA Loans do not have mortgage insurance
Yes, you read right, VA Loans doesn’t have mortgage insurance. This means that you won’t have to pay any monthly fees for mortgage insurance when you don’t pay 20 percent down payment. The VA’s guaranty is the reason because of which you will get this chance of saving more money.
- VA loans come with VA funding fee which is 2.15% on the first use and 3.30% upon second use. If you have a disability rating then the VA will waive the VA funding fee.