Va Mortgage Loans – What You Need To Know

By Author: Virendra Smith
Total Articles: 42
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VA mortgage loan is one of the best benefits available. This type of loan can be availed of by some veterans, active service members, reservists and members of the Public Health Service. It has become one of the more popular options, and all for good reason, among qualified home buyers. In fact, the government has guaranteed more than $63 billion in the past fiscal year alone for this program.

What are the Perks?

VA loans are accessible from almost all lenders. This gives qualified borrowers leverage as to where they wish to apply for the loan. It does not require any down payment as well. Thus, you can avail of it even if you really have no cash on hand. VA loans statistics show that 91 per cent of those who availed of this loan skip paying the down payment. There are also further regulations that the government impose in order to protect the borrowers. The government limits the amount of the VA loans closing costs, origination fees that can be charged and the appraisal fees. Apart from these, another big benefit one can enjoy is the elimination of private mortgage ...
... insurance (PMI). Since the government itself places guarantee on the loan, lenders are prohibited from requiring PMI. Without the PMI, borrowers can actually rack up some savings from the supposed insurance charges.

Who may avail of the Loan?

Loan applications may be given to both former and active members of the armed forces for as long as they meet the requirement for length and time of service including discharge conditions. Those discharged for service-related disability, some members of the Public Health Service and foreign veterans who served during World War II with the Allied forces are also potentially eligible. Widows or widowers are also eligible provided that their spouses’ death was service related. Spouses of those missing in action and prisoners of war are also qualified. Aside from the loan, they can also avail of VA Home mortgage refinancing.

What are its Limits?

The maximum amount guaranteed for the loan is $240, 000. While the amount is enough to buy a house in many parts of the country, this may not be enough to purchase one in high-priced markets. So those living in California or Manhattan may opt for another financing scheme.

However, it is not guaranteed that all applicants may avail of the maximum amount. Just like a conventional loan, the actual amount for VA loans refinancing or mortgage loans will depend on income, assets, debts and credit history. In case the qualified applicant wishes to sell the home for which they have availed a VA loan for, the would-be buyer can also assume the loan. Nonetheless, the applicant cannot use the loan to buy their next home. Also, those qualified can only borrow the difference between the outstanding loan and the maximum allowed.

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