Since Tuesday was Veteran's Day, I thought this was a perfect week to remind people about VA loans! VA loans are a wonderful benefit to our veterans. If you are thinking about buying a home and have VA eligiblity, make sure you talk to your loan officer about it.
VA loans are one of the two true zero down loans left, the other is USDA's rural development program. There is a VA funding fee, but that is added to your mortgage, so you do not have to pay it at closing. The amount of the VA funding fee varies based on any possible down payment, whether you are active duty or reserves, and the number of times you use your VA benefits. If this is the first time you have used your VA loan, typically the funding fee is 2.15%. There is not a monthly fee, which really helps lower your house payment. Both USDA and FHA loans have monthly fees for their mortgage insurance or guarantee fee. If you have any VA related disability, the funding fee may be waived – the amount depends on the amount of disability.
The seller can pay closing costs on VA loans, which can help you buy with very little money out of your pocket. There is a cap of 4% towards seller paid closing costs, many sellers may not want to pay more than 3% though.
Another benefit to the VA loan is a refinance called an Interest Rate Reduction Refinance. This allows you to refinance your home loan to a lower rate without an appraisal and with very little qualifications.
If you think you may be able to qualify for a VA loan, ask your loan officer. They are a great way to buy a home!
A special thank you this week to all those that have served or are currently serving in the military – I truly appreciate the sacrifices you have made for our country!