To be given the luxury of owning their dream home is one of the many advantages of serving in the military. The VA mortgage loan has been there since 1944 to help military personnel achieve their home-ownership vision. Get more info on Harbor View Funding.
As the most versatile form of mortgage loan, the Veterans Affairs mortgage loan or commonly known as VA loan was considered. In a nutshell, it offers borrowers financial protection as the VA promises to repay approximately 25 percent of each loan that it guarantees should the borrower default in payment. Therefore it provides a great range of terms and rates for eligible veterans. If you are in active military service with a term of more than 6 months or at least 6 years as Reserve personnel or if you are a military man’s widowed spouse then you qualify for a VA loan. What you need to do is obtain a written agreement that confirms your right and qualifications to take part in this program. This is paperwork that is called the VA office’s Certificate of Eligibility.
Key VA Loan benefits Unlike traditional mortgage loans, one of VA loan’s main advantages is the no down payment provision. That is apart from the availability of 100 percent funding, affordable interest rates, zero private mortgage insurance, zero deferred fees and flexible refinancing loans that do not require additional underwriting.
Ironically, given its large eligibility criteria, very few veterans have taken advantage of the VA home loan benefits. It seemed that most veterans were unaware of its presence and its characteristics.
While there are no down payment or closing expenses, there are some fees that veterans have to bear on each loan, such as appraisal fees and funding fees. This is intended to pay for expense of the VA Loan Guarantee Program.
Other aims of the VA Loan Essentially, the VA mortgage loan is meant to really enable military service men to support the needs of their families, hence it is not limited to use in buying residential property. There are many ways in which this form of loan will benefit such as refinancing an current direct loan to lower interest rates at present, cash refinancing, home renovation, purchasing many veteran-owned real estate assets such as single family condo unit, mobile home and farm residence. Nevertheless, it is not allowed to be used when purchasing investment assets. The aim is to give veterans a home, not anything else like making them owners of businesses through their real estate.
Reasons that made VA loan controversial Then and now, there are some reasons why applying for a VA loan is not a good option despite its great goal to help military service people. One of the reasons for this is the interest rates which would cost more than the normal traditional loan if extended in a shorter time frame. Therefore, from the viewpoint of a lender, it is not desirable to opt for VA loan because they would have to pay much of the closing costs that buyers usually pay. But this loan will be the perfect match for them for our military heroes.