More than 29 million veterans and
service personnel are eligible for VA financing. Even though many veterans have already
used their loan benefits, it may be possible for them to buy homes again with VA financing
using remaining or restored loan entitlement.
Before arranging for a new mortgage to finance a home purchase, veterans should consider
some of the advantages of VA home loans 1. Most important consideration, no downpayment is required in most cases.
2. Loan maximum may be up to 100
percent of the VA-established reasonable value of the property. Due to secondary market
requirements, however, loans generally may not exceed $203,000.
3. Flexibility of negotiating
interest rates with the lender.
4. No monthly mortgage insurance
premium to pay.
5. Limitation on buyer's closing
costs.
6. An appraisal which informs the
buyer of property value.
7. Thirty year loans with a choice
of repayment plans:
a. Traditional fixed payment
(constant principal and interest; increases or decreases may be expected in property taxes
and homeowner's insurance coverage);
b. Graduated Payment Mortgage--GPM (low initial payments which gradually rise to a level
payment starting in the sixth year); and
c. In some areas, Growing Equity Mortgages-GEMs (gradually increasing payments with all of
the increase applied to principal, resulting in an early payoff of the loan).
8. For most loans for new houses,
construction is inspected at appropriate stages to ensure compliance with the approved
plans, and a 1-year warranty is required from the builder that the house is built in
conformity with the approved plans and specifications. In those cases where the builder
provides an acceptable 10-year warranty plan, only a final inspection may be required.
9. An assumable mortgage, subject
to VA approval of the assumer's credit.
10. Right to prepay loan without
penalty.
11. VA performs personal loan
servicing and offers financial counseling to help veterans avoid losing their homes during
temporary financial difficulties. |
