|
VA Loans
VA guaranteed loans are made by lenders and guaranteed by the
U.S. Department of Veteran Affairs (VA) to eligible veterans for
the purchase of a home. The guaranty means the lender is
protected against loss if you fail to repay the loan. In most
cases, no down payment is required on a VA guaranteed loan and
the borrower usually receives a lower interest rate than is
ordinarily available with other loans.
Other benefits of a VA loan include:
-
Negotiable interest rate.
-
Closing costs comparable - and sometimes lower - than other
financing types.
-
No
private mortgage insurance requirement.
-
Right
to prepay loan without penalties
-
Mortgage can be taken over (or "assumed") by the buyer when
a home is sold.
-
Counseling and assistance available to veteran borrowers
having financial difficulty or facing default on their loan.
|
Although mortgage insurance is not required, the VA charges a
funding fee to issue a guarantee to a lender against borrower
default on a mortgage. The fee may be paid in cash by the buyer
or seller, or it may be financed in the loan amount.
A VA loan can be used to buy a home, build a home and even
improve a home with energy-saving features such as solar or
heating/cooling systems, water heaters, insulation,
weather-stripping/ caulking, storm windows/doors or other energy
efficient improvements approved by the lender and VA.
Veterans can apply for a VA loan with any mortgage lender that
participates in the VA home loan program. A Certificate of
Eligibility from the VA must be presented to the lender to
qualify for the loan.
|
