Everything you should know about a VA-guaranteed loan
January 3, 2019
A VA guaranteed loan is created by private investors and lenders such as banks, mortgage companies, and mortgage brokers for eligible veterans. The loans are meant for service member and veterans who are eligible and have a number of loan benefits. They are more appealing and affordable as compared to most conventional loans.
is the current veteran loan limit?
if you want to purchase a home, the lenders
can guarantee you up to about 400,000 dollars of the total loan with military
benefits and zero private mortgage insurance. The limit is not constant every
year and may vary in different.
If you already bought a home using a normal
mortgage, you can refinance your existing mortgage. There are two options, you could refinance
the loan and reduce the interest rates through a process known as streamline
loan or interest rate reduction refinancing loan or just simply take cash out
loan or equity. Through equity, you can get cash out for up to 100% of the
value of the home.
are the benefits of a VA loan?
The biggest benefit about a VA loan is that
you will not have to pay a down payment when making a home purchase. This means
that it will cost you less to get a mortgage loan. for conventional loans, you
will have to pay up to 20% of the cost of the home to get a mortgage.
There is a limit on the closing cost when
you make a mortgage payment. The seller is obligated to pay all the buyers
closing costs if the purchase is loan related. They may pay up to 4% of the
They have a typically lowered interest rate
compared to conventional mortgages. Most private lenders and government
financing institutions have imposed lower interest rates on military
mortgages. This means that the mortgage
repayment will be cheaper and easier.
There are fewer penalties imposed on the VA
loan. There are no additional charges and prepayment penalties on a military
mortgage. You can clear the payments as early as possible without making any
What VA cannot do
It will not guarantee that the house you are
about to purchase will be free of defects. Whether the home is newly built or
has previous owners, the VA will not hire any inspectors to look into the house
structure. You are on your own in hiring professionals to seek advice on the
purchase of a home. Sellers will give you the opportunity to inspect the home
and negotiate on the terms of the repair.
If your VA is for home building, you cannot
use it to instruct the builder on construction changes and contract renewal.
Your VA will only allow you to suspend the builder form participating in your
It will not guarantee that you will make a
good investment. Don’t expect for the property you buy on VA loan to always
appreciate in value. This will only depend on the house and market fluctuations.
Purchasing a home on VA is just like buying
a home on a conventional mortgage; ensure you higher professional to help you
with the inspection, legal work and choosing the right and most affordable