Friday, December 4, 2015

Breaking Down VA Home Loans and How They Can Help Your Family



There's a lot of misinformation out there about VA loans. You don't have to be buying your first home, you can use the benefit multiple times, and, according to the Department of Veterans Affairs, you don't even have to be active-duty military. 

Veterans, spouses of deceased veterans, and even long-time National Guard members are eligible for a VA loan. So what exactly can that loan do for your family that other mortgages can't?

Skip the PMI


Okay, you probably know that a VA loan can let you get a mortgage with no money down, but there are a number of other types of loan that will allow the purchase of a home for little or no cash up-front. 




The thing that sets the VA loan program apart is the fact that these other types of mortgages require something called Private Mortgage Insurance, or PMI, on every loan with a down payment of less than 20% of the loan amount. 

Since VA loans are guaranteed by the Department of Veterans Affairs, though, lenders don't need to worry about getting their money, so they can forego the insurance. This can cut hundreds of dollars off your monthly payment, freeing up cash for your family to use elsewhere.

Make Sure You're Getting a Quality Home


Inspections for a VA loans are notoriously stringent. That can be bad news for the seller, but it's good news for you. 

Unlike some other mortgage guarantors, the VA won't approve a loan on a house that has structural or safety issues like missing handrails, wood rot, or even fraying carpet in some cases. A bit finicky? Maybe, but it'll prevent your family from ending up in a home with hidden defects.

Speed Up Your Re-Fi


There's no need to worry about interest rates dropping after you get your VA loan. The VA's Interest Rate Reduction Refinance Loan, generally called the IRRRL or streamline loan, cuts out most of the time and hassle of a refinance by reusing most of the original paperwork from the home purchase. 

This can let you refinance your home in as few as 10 days with the help of companies like Low VA Rates with no appraisal fee and reduced underwriting costs.

Get a Bonus from the Seller


No, the seller won't be giving you cash directly, but under VA loan rules, the seller is responsible for miscellaneous expenses like broker fees and termite inspections that can really add up at closing time. 


It's also common for sellers to pay up to 4% of your closing costs under a VA loan, although the specifics of that will depend on what you and your agent negotiate.

With no money down, no extra costs, and some guidance toward getting a safe house, the VA loan is a no-brainer for anyone who fits the eligibility requirements. 

Keep it in mind to save you some money and give your family a little extra peace of mind when it comes time to buy your next home.

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