Since Veteran’s day was yesterday, I thought it was a great week to remind people about VA loans! VA loans are one of two ways you can buy with zero down – the other is a USDA rural development loan.
There are many benefits to those that have served our country – one of them is a VA home loan. VA loans do not require a down payment as long as the sales price is not higher than the appraised value. There is a VA funding fee that is added to the mortgage, but there is not a monthly fee- that saves you money every month, especially compared to a FHA loan. A VA loan might have a funding fee of 2%, but FHA has an upfront mortgage insurance premium of 1.75% and a monthly fee of .85%, plus you need 3.5% down! VA interest rates are also very similar to FHA rates, they both tend to be lower than a conventional loan.
VA loans usually have lower closing costs than FHA and conventional loans. There are fees that the buyer is not allowed to pay including fees like underwriting, processing, etc. If the veteran has a disability from the military, the VA funding fee may be waived also. In some counties in MN, disabled veterans may be able to have their property taxes waived or lowered. If you know a disabled veteran, you might want to ask them if they have checked with the county to see if they can get their taxes lowered. Not everyone is aware of this.
VA loans also allow for refinances – both cash out or a VA Interest Rate Reduction Loan. A VA IRRL allows you to lower your rate without an appraisal -they really just care that you are going to lower your payment. A VA cash out refi allows you to take out up to 90% of the home’s appraisal value. FHA and conventional loans only allow you to go to 80% of the appraised value.
With many of my family members and friends having served in the military, I want to take this moment to say Thank You!! I truly appreciate the sacrifices you and your family’s have made for our country. I know from past experience as an Army wife how hard your life can be – but also how gratifying it can be. Thank you for your service to our country!!
Leslie Vanderwerf, NMLS ID#335509, Cross Country Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
