Benefit From a VA Loan

eBenefits.Va.GovVA Retirements · VA Compensation – VA Loans Online VA Benefits; Apply for Veteran Benefits · View my VA Status · Access My Documents · Browse VA Benefits Links Skip Browse VA Benefits links. VA Benefits Internet Sites. VA Benefit By State

A VA loan is especially created to benefit veterans, other active military service personnel, and their spouses as well. It is probably one of the most flexible borrowing options on the real estate market these days. A VA loan will repay a quarter for each loan it guarantees in case the borrower fails to pay. For the lender, this could mean more protection for the money they lent out to military persons. Furthermore, it makes it more convenient for veterans and active military personnel to own a home regardless of the economic state. VA loans have fewer stringent requirements compared to most conventional loans and does not come with a PMI or a Private Mortgage Insurance, which most conventional borrowers are required to pay if they have less than twenty percent down payment for the property.

Veterans could borrow up to 100 percent of the total funds in order to purchase or refinance a property. The guidelines of a VA loan are not applicable to most conventional loans these days despite how good one’s credit standing is. VA financing will let the seller shoulder all the costs of closing, which includes items such as taxes, homeowners insurance, taxes and interest due from the purchase date to the end of the month. Moreover, the credit score and income guidelines allow a higher debt-to-income ratio than conventional loans. Higher ratios allow veterans to qualify or the kind of home that they want to buy.

A VA real estate loan does not require you to have a cash reserve, which means that you can purchase or refinance a home whether or not you have money in the bank. Remember that most conventional loans require a borrower to have at least two to six times the mortgage payment in the bank to serve as reserve. This could be difficult since most bank account fluctuates each month because of the state of the economy.

The closing costs usually incurred in a VA loan is considerably lesser compared to other conventional loans due to the absence of ‘junk fees’, as based on the VA guidelines. With all the benefits of a V.A loan, most people would think that it has a catch somewhere. However, a low interest rate and no down payment necessary are hard to compete in today’s market. As mentioned earlier, the main purpose of a VA loan is to help veterans make their dreams of owning a home come true. Veterans cold also mean those who are members of the Selected Reserve, active duty personnel and their spouses.

eBenefits.Va.Gov – If you are planning to apply for this kind of loan, it is necessary to look for a home first then approach a lender of your choice and then apply for a loan. Present separation or discharge papers or a Certificate of Eligibility. The appraiser appraises the property that you wish to buy and will estimate the home value. Upon approval of your application, you will then be able to get your loan.

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VA Loans – Use Your VA Benefit to Build a New Home

eBenefits.Va.Gov – VA loans are commonly used by veterans to purchase or refinance existing homes. But, a veterans home loan can also be used to build a new home.

There may come a time in life when a veteran may want to build his or her dream home. When using the VA Home Loan Guaranty Program to build a new home, the process is a little different than purchasing or refinancing an existing home. Of course entitlement, credit/income qualifying, and VA funding fees all apply. But, there are distinct differences in loan distribution and payments that must be understood by the VA borrower. VA Loans

When considering a veterans loan to build a new home, a borrower must choose a contractor with a valid VA builder ID number. This ID number is used to identify builders who have successfully registered with the U.S. Department of Veterans Affairs.

Once a VA-approved contractor is selected, a veteran can proceed with the mortgage process. A VA home loan for new construction must be closed before breaking ground. The borrower will provide written permission for the builder to be paid the amount of the VA home loan designated for construction. The remainder of the VA loan is put into an escrow account.

Most VA mortgages require payment within 30 days after closing. A loan for new construction, however, won’t require payment from the borrower until the home is ready for occupancy. Borrowers can ask to delay mortgage payments for up to one year from closing in order to give contractors enough time to finish construction. Even though borrowers won’t be making payments until construction is complete, it’s important to note that the builder must make interest payments each month during construction. And, if construction ends up taking a full year, the VA borrower will have 29 years to pay off the loan instead of 30.

While the home is being built, all typical construction fees must be paid by the builder. VA guidelines specifically prevent the borrower from paying any construction fees. A VA-approved builder must also carry his own hazard insurance and pay for title-update fees.

When using a VA loan for new construction, borrowers must understand that the funding fee associated with all VA home loans still applies. The VA funding fee for new construction loans is expected to be paid 15 days after closing or before. Most will pay the fee at closing. Certain disabled veterans and surviving spouses are exempt from the fee.

eBenefits.Va.Gov – For more info about VA mortgages for new construction, contact a V.A loan professional.

VA Mortgages are originated and funded by private lending companies and guaranteed by the U.S. Department of Veterans Affairs. Lenders must ultimately agree to the terms of each veterans home loan.