VA loans (Purchase)
The perception that VA loans are more cumbersome and involve a lot more paperwork may have some validity but (there are a few extra steps involved in processing and underwriting a VA loan) our experienced VA loan specialist have been trained to help streamline the loan process to save you time and money. Our thorough upfront loan consultation helps eliminate the guess work and puts you on the fast track to a smooth and painless closing. This is why so many veterans use American Nationwide Mortgage to take advantage of their VA benefits and get a VA home loan instead of a conventional loan.
Down Payment – VA Offers $0 Down
What makes a VA Purchase loan different is that in that in today’s market, banks are generally asking for 5-20% down on a conventional loan. Because a VA Loan is backed by the Veterans Administration or “VA”our investors do not require a down payment making a VA Loan the only loan programs that can still offer 100% financing.
No PMI Required on VA Loans
Because the loan is backed by the Veterans Administration, banks do not require PMI (private mortgage insurance); instead the VA charges a one-time VA funding fee that in some cases is waved if the veteran has a disability rating of 10% or more. Regardless the VA funding fee is a one-time fee that can be rolled into the loan or paid in cash at closing. This is an advantage for veterans because they will not have to pay an additional monthly PMI payment on top of their principle and interest payments. Also when the loan has reached a loan to value or “LTV” of less than 80% there is no burden to the veteran to prove this by paying for a costly appraisal. There is no need to do this since the loan does not carry PMI.
Less Risk and Lower Rates
A VA borrower has an advantage when shopping for rates as well. Interest rates are based on the banks capital risk should the loan go into default, but because a VA Loan is backed by the government the bank takes less risk. VA borrowers benefit with an even more competitive rate because the banks risk is offset. This, along with no PMI, can substantially lower your monthly payment.
Qualification Standards – VA is More Lenient
The qualification standards for each loan type are very different. Once again, because the loan is backed by the government, banks assume less risk and have less stringent qualification standards for VA Loans making them easier to obtain.
It is important to know the differences between the loan types and understand your options. Get connected to one of our VA Loan experts who can help guide you in determining what is the best for your situation.