A VA loan, or a Veteran's Assistance loan, is a great way to help the people who have fought for our country. This type of loan is much easier to acquire than other types of loans because veterans often have fewer resources than people who have worked in traditional jobs all their life. Here are some things you should know about a VA loan and how they work in case you're a veteran looking to buy a new home.
A Veterans Assistant loan is a federally guaranteed loan for eligible veterans. The loans are guaranteed by the federal government but you can get one through a bank or a private lending institution. Being guaranteed by the federal government protects both you and the lender by ensuring that the lender is protected if you default on your loan. Borrowers can also receiver a loan with no down payments and other financial benefits. With a VA loan you may negotiate your interest rates, closing costs can be lower than other mortgages, private mortgage insurance is not necessary, there are no prepayment penalties and assistance to borrowers who are in default. As of January 2006, veterans can now loan up to $400,000 with no down payment, but a one time fee must be paid to obtain a VA loan. This fee is required by law to contribute towards the cost of the veteran loan, thus relieving the burden on tax payers.
Getting a VA loan requires a few things on your part. First, you must be a veteran, of curse. But just because you are veteran doesn't necessarily mean you qualify for a VA loan. A borrower must still follow the basic principles that the bank or private lending institution has set, such as credit history and income standards. To qualify, you will need to show a military ID card, sign a certified statement that you will be the ones occupying the home and you must also be buying a residence on United States soil or United States-controlled territory.
Once you have your VA qualifications, it's now time to apply for the loan. It's quite simple to apply for a VA loan it's not that much different than applying for a regular loan. First, find the perfect home for you. Next, make an offer and sign a purchase agreement that is contingent upon the approval of your loan. Third, find a lender that will be willing to work with you. Fourth, present a Certificate of Eligibility which you can apply for with the lender or by filling out a VA Form 26-1880. Finally, wait for the lender to call you with the approval status. If the loan has been approved, you will be notified of a date set for closing.
If you are a veteran, it is very beneficial for you to look into getting a VA loan. There are plenty of advantages of getting one, such as no down payment and negotiable interest rates. The loan is federally insured so everybody is protected and you can have peace of mind when sleeping in your new home.
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