The Benefits of a VA Loan

VA guaranteed home loans are made by private lending, institutions, such as a mortgage company, savings and loan, credit union or bank. So what is the big deal about an VA loan when they are go through the same process as other loans....or do they?

 Unfortunately for the average consumer, we do not enjoy half the benefits of a VA loan. For example, the VA guaranty on the loan protects the lender if the payments are not made. It is intended to encourage lenders to offer veterans loans with more favorable terms such as no down payment. The amount of the guaranty depends on the loan amount and whether the veteran used some entitlement previously. The VA guaranty amount varies with the size of the loan and the location of the property. Two married veterans who have never used the Certificate of Eligibility, are not entitled to a double guaranty or loan amount. The same loan amounts and guaranty percentages apply.

The VA guaranteed loan can be used to buy a house, condominium in a VA approved project, an cooperative unit (co-op) in a VA approved project, to build a home using a VA approved builder, improve a home by installing energy efficient features, refinance an existing home up to 100 percent of the VA established value or refinance an existing VA loan to reduce the interest rate, and finally to buy a manufactured home and or lot.

After all those possibilities and options of using a VA loan, there are still more benefits to enjoy! Here are some of the benefits they have that we as consumers do not;

1. NO down payment (unless required by the lender and that is because the price more than the reasonable value of the property determined by the VA).

2. Negotiable fixed interest rate competitive with conventional mortgage interest rates.

3. The Buyer is informed of the estimated reasonable value of the property (Notice of Value (NOV)..

4. Limitations on closing costs.

5. No income or asset limits.

6. VA mortgages are assumable.

7. Not limited to first time buyers.

8. The benefit can be used again.

9. Forbearance extended to VA homeowners experiencing temporary difficulty.

10.No income or asset limits.

These are some of the benefits the VA loans have to offer for our men and women in the Armed Forces. Sounds tempting enough to join...?