For the majority of military borrowers, the V.A. loan represents the most powerful lending program on the market. It’s pretty great actually, no money down, and the loans have helped over 21 million military personnel, to become homeowners, since 1944.
The odd thing is there are VA borrowers who aren’t familiar with the programs benefits which are offered.Pivotal info:
* The V.A. loan is reusable, you can use it over and over as long a you pay off the loan each time. There are also ways to obtain another VA loan even is you’ve lost one to foreclosure in the past.
* The V.A. loan is made for properties in move in ready condition. This includes single family home, condos, multi unit properties and more.
* V.A. loan is for primary residency only, you cannot use this to buy a vacation home. Or use it to purchase an investment property.
* V.A. does not issue the loan, the agency rather provides a guaranty on each qualified mortgage loan. If you have a VA entitlement, the agency typically guarantees up to a quarter of the loan amount. The guaranty gives lenders confidence and helps service members secure great terms and rates.
* One can purchase a V.A. loan even with a bankruptcy or foreclosure. Even borrowers who have had a loan foreclosed on can still utilize their V.A. loan benefit.
* You will not have mortgage insurance. Mortgage insurance is a monthly fee that you pay with other programs when putting 20% down. The V.A. guaranty eliminates insurance premium. Which allows borrowers to save even more money each month.
* There is a mandatory fee. Due to there not being a mortgage insurance there will be a funding fee. This fee helps the VA keep the program running, and is required on both purchase and refinance. It can be added to your loan amount and waived for those with service connected disabilities.
* Limits on Co-borrowers. Some loan programs let you get a loan with just about anybody. That’s not the VA loan program. Having a co-borrower who isn’t your spouse or another veteran with VA loan entitlement who will live in the home with you will require a down payment.
* No Pre-Payment penalty. You can make payments any time you want. Saving tons of interest over the life of the loan. Just an extra $100 per month can help shave years off of your current balance.
Apply for a Certificate of Eligibility.
A veteran who doesn’t have a certificate can obtain one easily by making application on VA Form 26-1880, Request for Determination of Eligibility and Available Loan Guaranty Entitlement, to the local VA office.
* Decide on home the buyer wants to buy and sign a purchase agreement.
* Order an appraisal from VA (usually done by the lender.)
Most VA regional offices offer a telephone appraisal system.
Apply to a mortgage lender for the loan.
While the appraisal is being done, the lender (mortgage company, savings and loan, bank, etc.) can be gathering credit and income information. If the lender is authorized by VA to do automatic processing, upon receipt of the VA or LAPP appraised value determination, the loan can be approved and closed without waiting for VA’s review of the credit application. For loans that must first be approved by VA, the lender will send the application to the local VA office, which will notify the lender of its decision.
* Close the loan and the buyer moves in.
Isaac J. Hall II