VA Loan Benefits
VA Loan Benefits, is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. VA Loan Benefits
The VA loan benefits were designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). The basic intention of the VA direct home loan program is to supply home financing to eligible veterans in areas where private financing is not generally available and to help veterans purchase properties with no down payment.
Eligible areas are designated by the VA as housing credit shortage areas and are generally rural areas and small cities and towns not near metropolitan or commuting areas of large cities.
The VA loan allows veterans 103.3 percent financing without private mortgage insurance or a 20 percent second mortgage and up to $6,000 for energy efficient improvements. You pay a VA funding fee of 0 to 3.3% of the loan amount to the VA; and you can also finance this fee. In a purchase, veterans may borrow up to 103.3% of the sales price or reasonable value of the home, whichever is less.
Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the loan amount, allowing for larger loans with the same payment. In a refinance, where experts create new VA loan, veterans may borrow up to 100% of reasonable value.
In a refinance where the loan is a VA loan refinancing to VA loan (IRRRL Refinance), the veteran may borrow up to 100.5% of the total loan amount. The additional .5% is the funding fee for a VA Interest Rate Reduction Refinance.
VA loans allow veterans to qualify for loan amounts larger than traditional Fannie Mae / conforming loans. VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills.
The maximum VA loan guarantee varies by county. As of 1 January 2012, the maximum VA loan amount with no down payment is usually $417,000, although this amount may rise to as much as $1,094,625 in certain specified “high-cost counties”
Meanwhile, contrary to what many Americans think, it’s a very good time for service members to refinance or purchase a home in Miami. With mortgage rates continuing to hover at all-time lows and many homes selling at significantly discounted prices, it’s possible for those with good credit and income to purchase a great home.
One of the unique benefits afforded to military personnel is access to the Veterans Affairs Home Mortgage Loan program in Miami. This program offers tremendous mortgage benefits to active-duty service members, veterans, and some surviving spouses. VA home loan benefits can be used for a number of purposes, including purchasing or building a new home; refinancing a current mortgage, repairing or improving your existing home, or installing home efficiency measures in Miami. VA Loan Benefits
While a conventional loan might seem like a great bargain because of an advertised lower rate, keep in mind that you often need a high credit score of 720 or above to qualify for these best rates. The government back VA home loans; meaning banks can assume less risk with the loan and possibly price it lower than a rate you would qualify for from a bank. But even without a lower rate; there are a number of other compelling benefits that make the VA home loan program a better overall alternative in Miami. VA Loan Benefits
Program Benefits Miami
The VA program won’t deny a loan based solely on a low credit score, and most lenders don’t tier interest rates for better scores. Additionally, the VA program usually looks at only the previous 12 months of credit history; unless bankruptcy, a tax lien or a collections situation factors into your situation.
The VA home mortgage loan doesn’t require a down payment. This can save consumers up to 20 percent of the loan value when compared to a conventional loan.
Borrowers in Miami can often refinance to a lower rate within the VA program without re-qualifying for the program through the VA Streamline Refinance Loan.
If the borrower has a service-related disability, they may qualify for the lender to waive the funding fee, further reducing closing costs.
Starting the Process in Miami
You can begin the application process at any lender that offers a VA home loan in Miami. At some point, you’ll need to obtain a Certificate of Eligibility. This document will verify that you’re qualified for the program and outline your benefits level. Potential borrowers can go online to apply for the program and obtain their COE.
Once you have determined your eligibility, you can move forward with the home buying process. This generally involves finding a VA-approved lender (if you haven’t already), pre-qualifying for a loan, choosing a home, having it appraised, and then closing on the loan and property.
Be sure to review your credit report before you begin the process to correct any errors. Your lender in Miami will use this to make a decision about your eligibility and interest rate, so be sure that you put your best foot forward. VA Loan Benefits
With interest rates at all-time lows, it makes sense to consider all your options. Those service members who will be in a home for a short period of time might want to consider an adjustable rate mortgage to keep payments as low as possible. For those who have extra disposable income; plan to stay in their home for a long time, and can afford a slightly higher monthly payment; it makes sense to look at a 15-year fixed term loan. This will help you pay off your loan faster and save money on total interest paid on the loan.
It also makes sense to get pre-approved on your loan amount; so that you know what range of house you can afford. This will save an immeasurable amount of time and stress in your home search. It will also provide you with credibility when dealing with sellers who know you are pre-approved at that dollar amount. VA Loan Benefits
Among the advantages of VA loans in few words:
- Interest rates that are a little lower than those of conventional loans ; (the recent national average rate on 30-year VA fixed loans: 3.59%, about .60% less than the national average for 30-year fixed loans in general
- No down payment needed (if the purchase price doesn’t exceed the appraised value)
- No private mortgage insurance required on loans of more than 80% of a home’s appraised value; (which can often save borrowers $100 to $200 a month)
- Strict limits on closing costs
- No minimum credit score required
- No prepayment penalty for eliminating your mortgage ahead of schedule
With these advantages, little surprise the VA’s home-financing program is hitting record levels (recently guaranteeing its 21 millionth loan); and attracting the interest of vets like Gary Nordman, of Friendship, Wisc.
Finally, if you are asking about How VA Loans Work, then here we explain; The VA doesn’t make the actual loans. Rather, it partially guarantees mortgages and refinancing made through private lenders such as banks, credit unions, and mortgage companies. This guarantee encourages lenders to offer borrowers more favorable terms than on conventional loans. You can use the VA loan benefits to buy or build a primary residence; (not a second home or vacation property) or for a cash-out refinancing. VA Loan Benefits