What Is a VA Loan?

A VA loan can be used to help American servicemen or woman and or their spouses secure financing for a motrgage purchase. Only men and woman that have recieved honorable discharges and who have served more than 90 days or more qualify for a VA loan.

Bear in mind that the Veterans Administration isn't actually giving money toward your house or property. It provides a kind of insurance to lenders that you will make good on your obligation. If you get a loan for $144,000 or less, the VA will back you up to the tune of $36,000(this number may vary depending on the terms of your contract and agreement with the lender). This is unlike a Conventional Loan which the government does not insure.

If you take out a mortgage for more than $144,000, the VA will back you up to $60,000 worth of funds if you default. Bear in mind this money will not go into your pockets--it will go to the lender to whom you defaulted.

The advantages of a VA loan are many:

You may purchase relatively large properties without a down payment
You may purchase with minimum down payment if you choose 100 percent financing is available.

A VA loan should be used as a leverage to reduce your rates and qualify for a larger house that you may not otherwise get through conventional methods. Is should not however be used as a tool to spend beyond your means.

VA qualifiers do not have to pay for Private Mortgage Insurance, which can free up some funds to help relieve other consumer debt. If you come into funding early, you can prepay your VA loan without penalties. Finally, your seller can take care of your closing costs for you, further reducing your upfront debt load!

Please note-------VA loans do take longer to process. 

Also the borrower gets to right off the closing cost payments on his or her tax return, so the seller may not always be thrilled about paying the closing costs!

Still if you are a service member that qualifies, it might be in your best interests to compare VA loan rates with conventional and FHA loan program rates.

Here's how it works:

    •       100% Financing without Private Mortgage Insurance or 20% second mortgage.
           
    •        A VA funding fee of 0 to 3.3%(this fee may be financed) of the loan amount is paid to the VA.

    •       When purchasing a home veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less.

    •       When refinancing a home, Veterans may borrow up to 90% of a reasonable value in order to refinance where State law allows.


Apply today for a VA loan with American Mortgage and Equity Consultants, Inc 

 

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