Are you a Veteran? If yes, you have the best opportunity available to buy a home at the best possible rates and terms. A VA (Veterans’s Administration) mortgage is one of the very few remaining options for true 100% financing. As has been the case for years, veterans can buy a home with absolutely zero $$$$ down. AND, still get prime interest rates. Some programs give a higher rate when the down payment is zero because there is more risk in the loan. But not VA loans.
Also, there are no income minimums or maximums. If the borrower can qualify for the loan with their income, that’s all that’s required. A home can be purchased in any area. The mortgage amount, however, cannot exceed the maximum allowable by VA.
A veteran who purchases a home and obtains the tax credit (expires November 30, 2009) can actually come out ahead with the maximum $8,000.00 in their pocket – having spent very little upfront.
With the exception of disabled veterans, VA does have a VA funding fee. It can be added to the mortgage. But unlike FHA and conventional loans, there is no monthly mortgage insurance required. Eliminating monthly mortgage insurance saves a bundle. For a loan of $350,000, the extra for mortgage insurance under FHA would be about $160.00 each month. The veteran avoids this charge. That’s a heck of a savings.
With more than 25.5 million veterans and service personnel eligible for VA financing, this loan is very attractive. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for the National Guard and Reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.
VA mortgage loans are done by licensed, private lenders such as First Hallmark. The VA itself does NOT lend mortgage money directly. Loans cannot be obtained by calling or applying with the Veteran’s Administration.
ALERT: If you are a veteran and want to buy a home using your VA entitlement, find a lender that does VA loans. Some lenders don’t offer VA mortgages and you could be pushed into a program less suitable ONLY because that lender doesn’t underwrite VA loans.
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