subject: Va Loans Things Youre Supposed To Know [print this page] You may find it quite difficult to own a home because of the stringent requirements. However, if you are a qualified serviceman, veteran or their spouse, home ownership is made easy with VA Loan. With its no money down policy and flexible underwriting requirements and standards, it is one benefit you should really grab.
Looking for lenders who can grant this type of loan is also very easy. Most conventional lenders are VA approved. These lenders also benefit from this scheme since VA guarantees to pay back about a quarter of every loan it warrants in the event that borrowers default.
What is the Lending Limit?
Opposed to the general conception, there is no actual maximum amount for VA loans. The maximum amount to be availed of depends on several factors. Nonetheless, VA approved lenders will normally adhere to the guidelines and limits set out by federal mortgage agencies like Freddie Mac and Fannie Mae. Qualified borrowers throughout most of the country can avail a loan worth up to $417,000 without the need of putting down any money. The amount may increase in some of the more expensive places in the country. The loan limit may go as high as $625,000 or even higher in these areas.
What Can Be Purchased with the Amount?
The proceeds of the loan can be primarily used to buy or build single family homes. Yet qualified individuals may also utilize the loan to improve their present living conditions or to save money monthly through its refinancing options. Thus, VA loans have the flexibility to refinance direct loan or an existing VA guaranteed loan to lower mortgage rates for the VA loans. Qualified borrowers can also use the loan to repair, improve or alter their residence; refinance existing loan to take out cash; buy a farm residence; acquire a one-family residential unit in a condominium development approved by the VA and even simultaneously purchase and improve a home. The loan may be availed of for as long as the purchase is for the use and occupancy of the veterans, servicemen and their spouses.
Not for Everyone Though
There is no doubt that VA loans have already made such huge difference in the lives of millions. Many qualified individuals have become homeowners even though they have less-than-perfect credit and low income. But if youre someone who has liquidity and cash reserves, you may obtain better interest rate with a conventional loan.
