What is the VA Home Loan Guaranty?
A VA loan is a mortgage that you begin with a private lender and it is guaranteed by the Department of Veteran Affairs. These loans offer military veterans exceptional benefits, including low interest rates and with no down payment required*. The program was designed to help military veterans, like you to realize the American dream of home ownership.
The Department of Veterans Affairs provides insurance to lenders in the case that you miss a payment or multiple payments. Because the mortgage is guaranteed, we can offer a lower interest rate and terms than a conventional home loan. You won't have to purchase mortgage insurance. A VA loan may also have reduced closing costs and no prepayment penalties. VA home loans are available in all 50 states, but we are not! Check which states we lend in.
Additionally there are services that may be offered to veterans in danger of defaulting on their loans. VA home loans are available to military personal that have either served 181 days during peacetime, 90 days during war, or a spouse of serviceman either killed or missing in action.
Simply put, there is no better loan on the market for home buyers who have a background in the military. It's a great program!
To use their home loan benefits; the homebuyer does not need to be within certain income brackets. However, buyers are expected to have reliable income to cover monthly expenses – and to include their newest monthly mortgage payment.
The VA requires that all borrowers should have an amount of income left over each month after all large expenses take place. This amount is meant to take care of family needs, such as groceries, transport and other such things. It is referred to as residual income. This Residual income requirement means that the VA Loan maintains one of the lowest foreclosure rates of all major lending options. This residual income requirement helps homebuyers to meet their financial objectives, and to have extra in the event of an emergency.
Take advantage of your VA benefits!
- You can use it more than once in your lifetime.
- All qualified Veterans can obtain a VA loan! It's an Equal Oppurtunity!
- You might not need a down payment! It will depend on the value of the home, its location, and your entitlement.
- You won't need mortgage insurance. That's what the guarentee is for.
- There's a one time 'VA funding fee' that can be included in the loan.
- Those Veterans receiving VA disablility compensation are exempt from that VA funding fee
- The VA makes sure your closing costs are low.
- The VA Home Loan requires that the property is safe, sanitary, and sound.
- VA staff dedicated to assisting Veterans who become delinquent on their loan