Why a VA Loan might be your best option Wednesday, June 01, 2016
With memorial day being celebrated this past weekend by millions of patriotic Americans, I think now would be a good time to shed some light on one of the best types of lending products offered to our heroes in uniform. There are plenty of different types on loans available to consumers these days, but one in particular is geared towards those who have sacrificed and served our country. By no means will this be an exhaustive list of reason why this might be the best loan for you, buy it will offer a little insight into VA loans.
What is required to qualify for a VA Loan: At least 90 consecutive days active duty during wartime, at least 181 consecutive days active duty during peace time or at least six years in the National Guard or Reserves. Surviving spouses of veterans may also be eligible, but ultimately the Veterans Administration determines who is eligible.
On to the benefits of qualifying for a VA loan. Unlike Conventional or FHA loans that require 5% and 3.5% respectively, VA loans offer mortgages with as little at 0% down. Based on a home priced at $200,000, Conventional buyers will need $10,000 and FHA buyers would need $7,000. This could take years for a veteran or active service member to save. The other huge advantage for VA loans is that they do not require PMI(private mortgage insurance) at all, whereas both Conventional and FHA require PMI if a down payment of 20% is not made.
Taking advantage of this great loan type does have some restrictions. VA loans are used to purchase your primary residence. This means that if you are looking to purchase rentals or vacation homes, you may need to look at a different type of loan. These loans are in place to help service men and woman secure a home they will be living in full time, but if you are married, your significant other living in the home may qualify you.
Just as there are requirements with other loan types, properties secured by VA loans must meet safety guidelines. This means that if you are looking to buy a dilapidated or distressed house and fix it up, it could cause issues with the loan. The VA wants to loan on homes in good condition that will provide a safe and secure place to live.
Its always a good idea to speak with your loan officer to see if you qualify for a VA loan, and if you do, congratulations and thank you for your service!