A VA loan can be beneficial for veterans to get into a home. If you are planning to get this type of loan, however, there are things you should understand before you start the process. This can make things go much easier for you. Below are three of these things so you can get into your new home.
No Down Payment
In most cases, you will not be required to pay a down payment on the home you want to purchase. This does depend on some factors, however. For example, if the loan amount you are receiving from the VA is above the amount of what the house is you want to purchase, you may have to pay a down payment.
How much the down payment will be depends on the appraised value or the price of the home. All of this depends on your VA benefits, so you need to contact an administrator of the VA to determine the specifics of this. The best thing to do, however, is to find a home that is within the limits of what the VA is offering you. This will make things go much smoother for you and you won't have to worry about coming up with a down payment.
With a VA loan, you will not have to worry about being turned down. This is even true if you have bad credit or have no history of any credit. This is because the lender that provides you with the money for the home you plan to purchase is protected if you do not pay the loan. This is because the United States Department Of Veteran Affairs will cover the loan if you fail to pay for it.
This can make it much easier for you to get a loan and the process will go much faster for you. This is beneficial because borrowing money for a home can take time and the entire process can get very confusing.
You should also be aware that you will likely get a lower interest rate with a VA home loan. This means that your monthly payments will be lower when compared to a traditional loan with a higher interest rate.
Private Mortgage Insurance Not Required
With a traditional home loan, you must pay private mortgage insurance if your down payment is a low percentage amount. This percentage may be 20% or lower but it depends on the mortgage company you hire.
With a VA loan, you will not be required to purchase private mortgage insurance, whether you pay a down payment or not. This will also make your monthly payments lower because the private mortgage insurance payment is generally added to the monthly amount a homeowner is charged.
Talk with a company like VAtheFairway about getting a VA loan and they can answer any questions you may have.