The VA Home Purchase Loan
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Getting Prequalified
The first step toward securing your loan is getting prequalified. Call me direct at 303.668.3350 or complete my secure, online loan application.
Finding a Real Estate Agent
When using a VA Loan it is important to find a real estate agent that not only knows the intricacies of the VA Benefit Program but also understands the specific needs of veterans and active duty military members. I have put together an exclusive network of military friendly real estate agents for this purpose. Call me today for an excellent referral.
VA Loan vs. Traditional Mortgage
VA Loans
O% Down
VA Loans offer 0% down No PMI VA Loans are government backed and do not require private mortgage insurance Competitive Interest Rates The VA guaranty gives lenders a greater degree of safety and flexibility which typically means more competitive rates Easier to Qualify As a result of the VA Loan being backed by the government, banks assume less risk and have less stringent qualification standards for VA Loans making them easier to obtain |
Conventional Loans
Up to 20% Down
Conventional loans generally require down payments from 3% up to 20% PMI Required Private Mortgage Insurance is a requirement for borrowers who finance more than 80% of their home's value Increased Risk to Lenders Without government backing, banks are taking on more risk which, in turn, can result in a less competitive rate Standard Qualification Procedures Conventional loan options hold stricter qualification procedures that can put home ownership out of reach for some home buyers |
VA Home Loan Eligibility Requirements
Through dedicated service to our country, military service members and veterans qualify for a range of excellent loan benefits.
In order to qualify for a VA Loan there are specific service conditions each borrower must meet.
You may be eligible for a VA loan if:
In order to qualify for a VA Loan there are specific service conditions each borrower must meet.
You may be eligible for a VA loan if:
- You have served 90 consecutive days of active service during wartime
- You have served 181 days of active service during peacetime
- You have more than 6 years of service in the National Guard or Reserves
- You are the spouse of a service member who has died in the line of duty or as a result of a service related disability
Regulations and Fees
Although the VA Loan is a federal program, the government generally does not make direct loans to veterans. Instead, private lenders, including Nations Reliable Lending, finance the loan while the Department of Veterans Affairs offers a guaranty. This guaranty protects the lender against total loss should the buyer default. This guaranty provides incentive for private lenders to offer loans with better terms.
VA Funding Fee
The VA funding fee is paid directly to the Veterans Administration to ensure the program continues for future generations of military home buyers. The VA funding fee varies depending on the borrowers specific circumstances and does not apply for veterans with service connected disabilities.
For example, if this is your first time using the VA Home Loan Program, the funding fee is typically 2.15% of the purchase price of the home. For subsequent use of your VA Loan benefit, the fee is 3.3% percent.
VA borrowers can roll the funding fee into the overall cost of the loan. The VA also places limits on closing costs for veterans and also allows sellers to pay most or all of those expenses. Many of my borrowers purchase a home with no money due at closing.
For example, if this is your first time using the VA Home Loan Program, the funding fee is typically 2.15% of the purchase price of the home. For subsequent use of your VA Loan benefit, the fee is 3.3% percent.
VA borrowers can roll the funding fee into the overall cost of the loan. The VA also places limits on closing costs for veterans and also allows sellers to pay most or all of those expenses. Many of my borrowers purchase a home with no money due at closing.
VA Loan Benefits
The VA Loan program is the most powerful home loan program on the market for many veterans, service members and military families. These flexible, government-backed loans come with significant benefits that opens the doors of home ownership to veterans.
The increasing popularity has stemmed from the loan program's signature benefits which include:
1. No Down Payment
Saving money and building credit can be difficult for service members who are constantly on the move. With the VA Loan, qualified borrowers can finance 100% percent of the home's purchase price without having to have a down payment.
2. No Private Mortgage Insurance
Many conventional lenders require borrowers to pay private monthly mortgage insurance unless the down payment is equivalent to 20% of the purchase price. Private mortgage insurance (PMI) protects lenders in the case of borrower default. With a VA Loan, PMI is not required. This is because the federal government backs all VA Loans and assumes the risk on behalf of the borrower that is typically covered by the PMI.
This VA Loan advantage allows you to build more equity in your house quicker thereby effectively saving you thousands of dollars over the life of your VA mortgage loan.
3. Competitive Interest Rates
Interest rates on home loans are based on risk assumed by the bank to finance the loan. Because the VA backs each VA Loan with a guaranty, financial institutions carry less risk and can offer interest rates that are typically 0.5% to 1.0% percent lower than conventional rates.
The combination of lower interest rates, the ability to purchase a home with zero money down and no private mortgage insurance are some of the great benefits that result in significant savings for our heroes.
4. Basic Allowance for Housing
Basic Allowance for Housing (BAH) is a benefit for qualified active military members. Lenders can count your Basic Allowance for housing as effective income, which means you can use BAH to pay some or all of your monthly mortgage costs.
BAH varies based on your pay grade, your geographic location and your number of dependents.
5. No Prepayment Penalty
The VA Loan allows borrowers to pay off their home loan at any point without having to worry about a prepayment penalty. With the absence of a prepayment penalty, borrowers are free to consider future home purchases and refinancing options.
The increasing popularity has stemmed from the loan program's signature benefits which include:
1. No Down Payment
Saving money and building credit can be difficult for service members who are constantly on the move. With the VA Loan, qualified borrowers can finance 100% percent of the home's purchase price without having to have a down payment.
2. No Private Mortgage Insurance
Many conventional lenders require borrowers to pay private monthly mortgage insurance unless the down payment is equivalent to 20% of the purchase price. Private mortgage insurance (PMI) protects lenders in the case of borrower default. With a VA Loan, PMI is not required. This is because the federal government backs all VA Loans and assumes the risk on behalf of the borrower that is typically covered by the PMI.
This VA Loan advantage allows you to build more equity in your house quicker thereby effectively saving you thousands of dollars over the life of your VA mortgage loan.
3. Competitive Interest Rates
Interest rates on home loans are based on risk assumed by the bank to finance the loan. Because the VA backs each VA Loan with a guaranty, financial institutions carry less risk and can offer interest rates that are typically 0.5% to 1.0% percent lower than conventional rates.
The combination of lower interest rates, the ability to purchase a home with zero money down and no private mortgage insurance are some of the great benefits that result in significant savings for our heroes.
4. Basic Allowance for Housing
Basic Allowance for Housing (BAH) is a benefit for qualified active military members. Lenders can count your Basic Allowance for housing as effective income, which means you can use BAH to pay some or all of your monthly mortgage costs.
BAH varies based on your pay grade, your geographic location and your number of dependents.
5. No Prepayment Penalty
The VA Loan allows borrowers to pay off their home loan at any point without having to worry about a prepayment penalty. With the absence of a prepayment penalty, borrowers are free to consider future home purchases and refinancing options.
VA Approved Lender; Not endorsed or sponsored by the Department of Veterans Affairs or any government agency
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