If you have ever been in the military, serving in any of the armed forces, and you were honorably discharged, you have the ability to qualify for a certain type of mortgage available in the United States which is called a VA loan. These are loans that are actually guaranteed by the US Department of veteran affairs. They are issued to serviceman and women that qualify, and there are many reasons why these types of loans are highly coveted by those that are purchasing their very first property. Here is an overview of what VA loans are, how to use a VA loan calculator, and why you should consider pursuing this avenue of funding if you are a United States veteran.
What Are VA Home Loans?
This type of loan is essentially long-term financing, provided to those that have served in the US military, and is also available to the spouses of those that have survived after a veteran has died. These are often sought after by those that are living in regions where private financing is not available, and also to help those that are on a limited budget in that they do not require any type of down payment. If you happen to be in an area that is rural, a place where funding is very difficult to achieve, the fact that you have served in the military gives you special privileges, including obtaining VA home loans.
Benefits Associated With VA Loans
There are many benefits associated with these loans which include the fact that they are easy to qualify for, that a veteran can borrow over 100% of the actual value of the home, part of what is called the VA interest rate reduction refinance option. When you compare these loans to getting a traditional Fanny Mae loan, you will notice that the amount that you can borrow is much higher. In many cases, a veteran can borrow as much as $400,000 in rural areas, and well over $1 million in high-cost counties.
Funding Fees To Consider
These are fees that are paid to the VA, unless you are disabled, which are similar to points that are paid to lenders in order to get a reduced rate on a typical mortgage. There will also be closing costs that must be paid such as survey charges, recording fees, title insurance, the cost of their credit report and also the VA appraisal of the home itself. Although these VA funding fees are far less than you would pay with a traditional bank, it is still money that will come out of your pocket. Always understand how much it will cost to purchase your first home, even if you are getting such a significant discount as when you are utilizing VA loans to purchase your home.
Now that you have a basic overview of what are VA home loans, and you are either in the service, or you are retired, you can talk to a VA home loan office to find out more about purchasing a home in your area, a financial decision that is made much easier by all of the discounts that are available for veterans today.