A house is one of the most precious things you will ever own in your lifetime. In many scenarios, real estate becomes more expensive as time progresses. That’s why one rarely goes wrong with house-purchasing. This may sound cliche, but homes are, indeed, a wise investment. At the same time, it’s also true that houses in general are crazy expensive. But it’s a good thing that there are assorted home loan programs to help us in our expedition to buying a house.
One good example is the Veterans Affairs home loan. What sets this home loan apart from its other contemporaries is that no down payment is needed in most cases. It’s also extremely generous as it includes benefits such as being able to pack closing costs to the mortgage and being able to have someone assume the loan if ever one decides to do so. These arrangements aren’t available in many home loan types. As expected, however, this isn’t for everyone’s taking and only members in the armed forces are eligible.
If you’re one who serves the country, check the list out below to see if you can apply for one:
- Borrower must have served 90 successive days or active service over wartime.
- Borrower must have delivered 181 days of operating service over peacetime.
- Borrower must have more than 6 years of rendered service in the National Guard or Reserves.
- Borrower must be a spouse of a military personnel who has died over war or has died as an outcome of a service-caused disability.
Only one condition must apply for someone’s application to be considered. What’s great about VA loans is that it isn’t cut-throat with FICO scores. FHA loans and conventional loans will require a certain score; usually 500 to 640 being the lowest. With a VA loan, there isn’t any rating required, but it will come extremely advantageous to have good standing. One has to know that VA loans are guaranteed by the government; the U.S. Department of Veterans Affairs to be particular. Interestingly, the money will not come from the federal government. One of their sole responsibilities is only to back up mortgage.
So where does the Veterans Affairs home loan come from, you ask?
The loan is both given and granted by a private lending enterprise of your choice. Having said that, a FICO score that’s considered to be “good” in most aspects will work you wonders. At the end of the day, one will still want a lender to be attracted to his or her paying capacity and credit reports. After all, that’s how you get them to collaborate with you. Just like loans under the Federal Housing Administration, a VA mortgage involves the government. That way, standards and prerequisites aren’t held as high. Because of this fact, more people are eligible to apply, potentially putting commercial lenders at risk. This is also why lenders usually only grant loans to professionals and people who have amazing credit—because realistically speaking, these people are less capable of flaking on a loan.
Moving forward, there are several reasons for a qualified military member to love this home loan program. For starters, no mortgage insurance is obligated from them. That alone already takes a huge chunk off of financial responsibilities. True enough, over 20 million service members have enjoyed this privilege and continue to do so by the day.
So with all these exclusive deals, what only are the fees that a debtor will have to pay for?
A VA funding fee comes with the loan. The price of this fee is set by one’s qualifications and whether or not he or she is taking advantage of a VA loan for the first time. That said, any borrower who’s ever had a disability that still exists to this day as a result of having served during war will not have to pay for a funding fee any longer.
If one wishes to make cheaper the funding fee they are obliged to pay, he or sh can expend a down payment. Loan limits, on the other hand, are another story. Where a person decides to buy an abode will help put a figure as to how much these houses will cost. A huge factor to this is an area’s county limits. Presently, the maximum loanable amounts exceed $400,000 to $600,000 and sometimes even more.
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