Great deals offered
to veterans looking to finance home We're
from the government, and we're here to help
you. That's a favorite line of skeptics who
don't think that the government is always your
best friend.
But if you're a
veteran interested in buying a home, you simply
can't afford to ignore the VA home financing
program.
VA home
financing is just too good a deal to pass
up, says Richard Roll, president of
American Homeowners Association. Although
government-backed loans sometimes take a bad rap
for excessive red tape, the advantages of a VA
loan are well worth it, especially because
there's no down payment required in most
cases. For information, see
http://www.ahahome.com
And if the lender
is approved by the VA for automatic processing,
your loan can be processed and closed by the
lender without waiting for VA approval on the
credit application and appraisal.
The VA (Department
of Veterans Affairs) says that more than 29
million veterans and service personnel are
eligible for VA financing. Check with the VA on
your eligibility. Different requirements apply
depending on when and how long you have served.
Other than that,
vets must clear the same types of hurdles as most
borrowers in applying for a loan. Income must be
stable and sufficient to meet the mortgage
payments plus any other loans, as well as pay
living expenses. The lender will do a credit
check, too.
Why is it such a
deal? Again, the big ticket item for most home
buyers is the down payment, and with a VA loan
there is no down payment required in most cases.
VA loans also have caps that limit the closing
costs you'll have to pay.
In addition, you
won't have to purchase private mortgage
insurance, which lowers your mortgage costs. And
you can get a graduated payment plan with lower
initial monthly payments that gradually rise to a
fixed payment starting in the sixth year.
What does it cost?
Borrowers must pay a basic funding fee of 2
percent to the VA. (Certain veterans are exempt.)
The funding fee may be paid in cash or rolled
into the loan. A down payment of 5 percent or
more will reduce the fee to 1.5 percent and a 10
percent down payment will reduce it to 1.25
percent.
All eligible
Reserve/National Guard individuals pay a funding
fee of 2.75 percent.
You can refinance
an existing VA home to lower the existing
interest rate if you pay a 0.5 percent funding
fee.
Veterans who are
using their loan entitlement for a second or
subsequent time, who do not make a down payment
of at least 5 percent, are charged a funding fee
of 3 percent.
For information on
any aspect of buying or selling a home, go to
http://www.ahahome.com, the web site for American
Homeowners Association.
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