subject: VA Loans Help Soldiers Find A Place Called Home [print this page] VA Loans Help Soldiers Find A Place Called Home
One of the mixed benefits of being in the military is to be granted the advantage to acquire their dream home. Since 1944, the VA mortgage has been there to help military personnel achieve their dream of home ownership.
The Veterans Affairs homeowner's loan loan or commonly known as VA loan has been regarded as the most adaptable type of loan agreement loan. In a nutshell, it gives fiscal security to lenders as the VA promises to repay roughly one fourth of each loan it guarantees if the debtor default on payment. Thus, it offers great package of terms and rates for qualified veterans. If you are in active military service with over six months of tenure, or at least six years as Reserve personnel, or if you are a widowed spouse of a military man or woman then you qualify for a VA loan. You simply need to is to obtain a formal document which shows your entitlement and eligibility to engage in this program. This is paper is called a 'Certificate of Eligibility' and is granted by the VA office.
Major bonus of VA Loan
Opposed to conventional homeowner's loan loans, one of the large benefits of VA loan is its no down payment requirement. This is apart from the opportunity for 100% financing, competitive interest rates, zero private homeowner's loan insurance, zero prepayment penalties, and structured refinancing loans that do not need extra underwriting. Although there are no deposit or closing costs, there are some fees that veterans need to shoulder, such as appraisal fees and a funding fee that is imposed on each loan. This cost is designed to pay for VA Loan Guaranty Program.
Ironically, not many veterans have applied for the VA mortgage loan benefits despite its broadreaching eligibility requirements. It may even appear that most veterans were unprivy to its existence and features.
Other purposes of the VA Loan
Basically, the VA home loan loan is meant to significantly help military service men sustain their family's needs; therefore a VA loan isn't limited for use in purchasing residential properties. There are other ways on how this type of loan can assist such as refinancing an past direct loan to minimalize interest rates currently, refinancing for straight cash, home improvement, purchasing other real estate properties to be owned by the veteran such as single family condo unit, trailer-park home or even farm residence. Nevertheless, it is not permitted for use in purchasing investment properties. The goal is to give the veterans a home for themselves, as opposed to making them business owners through their real estate property.
Reasons that made VA loan unpopular
With the many benefits of choosing a VA loan agreement, there are however some reasons why applying for a VA loan agreement is not a good choice. One of the reasons is the interest rates which if applied in a shorter timeline will incur a greater cost than the traditional conventional mortgage. Thus, from a lender's perspective, it is not ideal to opt for VA loan since they will have to shoulder most of the closing cost which is conventionally shouldered by buyers. Nonetheless, for these military heroes, a VA loan must be a great fit for them.
