Living in a beautiful home is the dream of most people. Some get it easily while others could not due to financial restrictions or other reasons. However, lacking proper knowledge of various financial methods of purchasing a home, we could lose the opportunity of buying a dream home. VA loan is such a method through which military persons and veterans can easily purchase a house. A VA loan is a type of mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). With no down payment and a low interest rate, you can take advantage of this loan scheme to a great extent.
There are various questions and doubts in people’s mind regarding VA loan and solutions of them are essential to get. Let us discuss, some of them:
What is a VA loan?
A VA loan is a loan scheme supported by the United States Department of Veterans Affairs (VA). Through this scheme, federal government supplies home financing to eligible military persons and veterans to purchase properties without any down payment. The interest rates of this loan are also very low, so people can make monthly installments easily.
How does VA loan work?
This loan is provided by private lenders, such as banks, mortgage companies, and other financial institutions to eligible veterans for the purchase of a house for their own personal occupancy. The government protects a lender against loss if a borrower fails to repay the loan due to some reason.
What is the eligibility?
The federal government has set eligibility criteria to get VA loan that every potential borrower need to meet. For this, you should be a:
1. Regular active duty member with at least one hundred eighty days of service experience. Or
2. Service person who has spent a minimum ninety days on the duty for gulf war. Or
3. National Guard/Reserve member with at least 6 years of work experience. Or
4. Retired veteran with a minimum one hundred eighty days of service experience. Or
5. Spouse of a service member who died in the line of duty, or as the result of a service-related disability.
Is there any prepayment penalty?
In case if you pay off your VA loan early, you need not pay a prepayment penalty to your lender. This policy has provided peace of mind and many other benefits to the borrowers.
Is VA loan assumable?
Yes, it can be assumable. For a VA loan committed on or after March 1, 1988, you may sell your house to someone who agrees to assume your loan if the creditworthiness of that person is approved. This is one of the most important selling points at the time of selling your home.
How much down payment & mortgage insurance required?
In VA loan, you can get 100% financing without private mortgage insurance. A lender is protected against loss in case you fail to repay the loan. This protection of a lender allows borrowers to obtain favorable financing terms without any down payment.
Are there any charges in case of late payment?
The servicing company of a VA Home Loan cannot get late charges from the borrower unless payment is more than 15 days overdue. Any late charges may also not exceed 4% of the total payment amount. In addition to this, VA also provides financial counseling in case of temporary financial difficulties.
What is the minimum credit scores that is required to a VA Home loan?
The VA does not set a minimum credit score for VA Mortgage loans, but most of the VA mortgage lenders require a middle credit score of 500 Fico or higher. However, some lenders set a minimum score of 620 or higher minimum score.
Conclusion: Due to several benefits of VA loans, lots of military persons and veterans are taking advantage of the VA loan program. The terms such as minimum interest rate, low credit score, no down payment, security to the lender, no insurance etc. make this loan better than others. If you find yourself eligible for a VA loan, you can take the help of some reputed VA mortgage broker, such as Quick VA Loans that provides VA home loans. They have a qualified team of members who have long years of experience in this field and can provide you with all the required guidance to fulfill your dream of getting your own home.
Quick VA Loans lends in the following areas: Colorado, Florida, Idaho, Texas, Utah, Wyoming.