Is this the right loan program for you?
The VA offers home loan guarantees to veterans, who meet certain eligibility requirements. While many believe that the VA will act as the lender, this is untrue. You will work with every-day lenders who have made agreements with the VA. In turn, the VA gives the lender a guarantee on your loan.
What does this mean? In essence, you will take out a traditional home loan, and the VA guarantees the lender payment if you default. This type of loan, because it is “backed” by the government, typically has higher interest rates than traditional, conforming programs.
To answer the question: Is this the right loan program for you….maybe!
If you are purchasing a home for the first time and lack “closing costs” (typically ranging up to $10,000), this can be a great way to get into a home and stop renting. (An exception would be if the seller agrees to pay all closing costs, allowed by VA guidelines.)VA guaranteed loans allow you to wrap closing costs into your mortgage. Likewise, you can finance up to 100% of the purchase price under one loan with no principle mortgage insurance (PMI).
However, if you have the funds available for closing costs, there are many traditional options available for you with lower interest rates and lower monthly payments. Many lenders now offer 100% loan-to-value (LTV) loans. Regardless of which loan program you decide upon, your credit, income, collateral and work history need to be sufficient to satisfy your program.
More detailed information on VA home loan guarantees will be forthcoming. The Military Veteran is working hard to get you the most comprehensive information available on the web. So, please check back soon; and check back often.
Until then, if you are in the market to purchase or refinance property…shop around before committing! The one deceit in the mortgage business is loan officers telling you not to shop around because it will damage your credit score. This is a ploy often utilized to stop competition. When credit is frequently pulled by lenders within a short amount of time, the credit bureaus realize you are shopping, and it typically does not affect your score. If you want to be a savvy shopper on your largest investment, find the best deal out there!