Veteran Affairs Loans
Veteran Affairs Loans, Some Things To Bear In Mind
It seems that veterans of war should get all the assistance they need once discharged, from the government. After all, they have worked actively for it and get their salary and pension, too. But not all is channeled through the government. There are private companies that take care of some matters, like loans for purchasing a home, sponsored and insured by the Government.
The VA Home Loan Program does not grant loans, as some people believe. It is common for veterans of war or unremarried spouses of servicemen who died while on duty not to know this until they actually start inquiring for a loan. The VA creates and insures the program for private companies to implement.
To know whether you are eligible for a VA loan, you must first request a certificate of eligibility. For this you will be asked to fill in a form issued by the private lender or a VA Form 26-1880, for you to enter your data and return it. It can even be filled in on-line, through secure servers. This form is then processed by the VA, who issues a certificate of eligibility. There are a number of eligibility criteria which are made known by the VA, so that the borrowers know exactly what to expect.
You are eligible if you have been discharged from the armed forces for a reason other than dishonorable and you have served in the Navy, Marine Corps, Army, Air Force or Coast Guard. The VA loans are also available to active duty personnel with a minimum time of service of 90 days and for members of the Selected Reserve.
Advantages Against An Ordinary Mortgage
In most cases there is no down payment to be made, but there is a limitation on the amount of the mortgage, which can not exceed the sum of 0,000. There is no mortgage insurance to pay, since the VA insures the mortgage for the veteran. The closing costs are limited, which increases the benefits and borrowers have the right to prepay the mortgage without penalty.
What May You Buy
The VA Mortgages can be used to purchase a home, including townhouses and condominium units in any VA approved project. You may also build a home or purchase a run-down house to improve it, purchase a manufactured home or improve an existing home by installing energy saving features.
The interest rates follow the general rule, so there is no difference with other mortgage loans. There is a downside, though. All VA loans have a one time funding fee, as of 1982, which can be, on average, around 2%. They will oscillate, depending on whether the borrower chooses to make a down payment or not.
It is convenient to shop around and evaluate conventional and FHA loans, but if there is no difference in the interest rate, then it should be very advisable to go for a VA loan, since there is no down payment.