About Veterans Home Loans And Va Streamline Refinance Loans

Though there are many different types of mortgage loans available

, if you are a veteran of the U.S. military you may qualify for a VA Home Loan. Veterans Home Loans have a number of advantages over conventional mortgage loans as part of a government program to assist veterans in the purchase of a primary residence. It allows military veterans the opportunity to buy homes that they will live in, as opposed to properties to rent or other type of income property, with no down payment.

To qualify for a Veterans Home Loan, a good credit score and qualifying income is required. Though there is no required down payment for the loan, there may be associated home buying costs for closing, home insurance, inspection, and related costs. A VA Home Loan does allow the home seller to pay for or assist with closing costs up to four percent of the purchase price. For example, if the accepted offer on the home is $200,000, you can request the seller to pay up to $8,000 in closing costs. By negotiating the closing costs into the offer and with no down payment for the loan, it is possible to purchase a home without any costs out of pocket.

Veterans can usually get a lower interest rate from a VA Home Loan than is obtainable from a conventional loan. Additionally, the interest rate is not dependent on the credit score like conventional loans are. This means that the interest rate is the same whether the credit score is 650 or 750. Most conventional loan interests rate are higher for those who have lower credit scores.

Another program available to military veterans is the VA Streamline Refinance Loan or Interest Rate Reduction Loan (IRRL) that allows veterans to refinance current VA Home Loans at lower interest rates when available. This can result in significantly lowered monthly payments. A VA Streamline Refinance Loan does not require home appraisal, income verification, or a qualifying credit score. It only requires a current VA Home Loan in good standing on the same property to be refinanced. The one-half percent VA funding fee can be included in the loan so no out-of-pocket costs are required.

To refinance the property with a VA Streamline, it is not required to use the same lender as the one used for the original VA Home Loan. Any VA approved lender that offers the service can be used, so it is wise to shop around for the best rates and terms available, just as you would for a conventional loan.

by: Art Gib

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