Since Veteran’s Day is next week, I thought it was a great time to look at VA loans. They can be a wonderful way to purchase a home – one of two ways to buy that is a true zero down loan!
VA loans are available to those that have served in the military and in some cases, surviving spouses. You will need a certificate of eligibility to show that you qualify for a VA loan.
VA loans do not have a monthly mortgage insurance, but they do have a VA funding fee that can be added to the mortgage. Typically the VA funding fee is between 2.15-3.3% on a purchase. It varies due to previous use of your VA loan benefit. If you are refinancing a VA loan, it may be as low as .5%. Because there isn’t a monthly fee, it helps lower your monthly payment compared to FHA and conventional loans with less than 20% down.
Buyers can ask the seller to contribute towards their closing costs. This helps to lower the amount you will need to purchase a home. You can also get a gift to help with the closing costs. There are also some fees that typically cannot be charged to a buyer, so your closing costs may be less than other loans.
The biggest drawback to a VA loan is that there are some sellers that may not want to deal with a VA appraiser. VA appraisals have a potential to have work orders that the seller may not want to fix. Sometimes the VA appraisal comes in lower than the sales price- but that can also happen with FHA and conventional appraisals.
Do you qualify to use a VA loan? Talk to your lender and see what your options are. A VA loan may be a great way for you to buy now. Interest rates are low, home prices are great- getting into a home with zero down can be a wonderful way to buy.
And most important – thank you to all those that have served our country!! I appreciate the sacrifices you and your family have made for us.
Leslie Vanderwerf, NMLS ID#335509, AMEC Home Loans, An Equal Housing Lender, NMLS#150953 – Email – Website
