If you or your loved ones belong to a military background, then you are eligible for VA loans. These are mortgage loans offered by private lenders for the veterans and service members. If you have enquired about VA loans, you might have heard mixed reviews about it. If you are thinking of purchasing VA loans, then you need to gather information about the same.
Overview of Veteran Loans
Your VA home mortgage loans are a bit different than your conventional loans. These loans are guaranteed by the government wherein the government will agree to pay a portion of your loans, in case of payment default from your side. When it comes to any type of loan, you need to go for credible firms such as Sammamish Mortgage in Bellevue, Washington.
This firm offers flexible loan options wherein you can avail of the VA loan with a less credit score. They even offer a 100% refinancing option without paying any monthly insurance or down payment. You might think that anyone from a military background can opt for this loan. There are certain eligibility criteria, which you need to pass to avail this loan.
- You need to be a spouse of a service member who passed away while working for the military
- You need to an active military member or a veteran who has served the military for 90 consecutive days during war
- You need to be an active military member or a veteran who has served the military for 181 days during peacetime
- You have at least 6 years of work experience as a National Guard or Selected Reserve
In addition to this, you also need to produce a Certificate of Eligibility (COE) to the banks to qualify for these types of loans.
Other qualifications required by many mortgage lenders include:
- Your FICO score should be about 620
- The debt to income ratio should not be more than 41%
VA loans can also be taken out for multi-unit homes provided you live in at least one of the units. Different mortgage lenders will have different limits set, which you might need to discuss with them before proceeding further.
The Popularity of VA Loans over Their Counterparts
Now that you are aware of how VA loans work, you might want to learn about its benefits:
- You can purchase your home without any down payment
- There is no need to pay any Private Mortgage Insurance (PMI)
- You can even apply for a VA loan if you have filed for bankruptcy or foreclosure
- There is no penalty for prepayment
- You can opt for either fixed or adjustable rates with VA loans
- The closing costs for VA loans are lower when compared to traditional ones
- VA loans are transferable to other VA eligible buyers
- There is no limit set by mortgage lenders on the amount that you can borrow on VA loans
You need not have to rush while deciding on applying for a VA loan. Many online resources can help you compare loans and make the right choice.