August 6th, 2014 9:47 PM by
What is a VA Loan?
VA Loan vs. Traditional Mortgages
0% Down(for qualified borrowers)
VA Loans are among the last 0% down home loans available on the market today.
Up to 20% Down
Conventional loans generally require down payments that can reach up to 20% to secure a home loan, pushing them out of reach for many homebuyers.
Since VA Loans are government backed, banks do not require you to buy Private Mortgage Insurance.
Private Mortgage Insurance is a requirement for borrowers who finance more than 80% of their home's value, tacking on additional monthly expenses.
Competitive Interest Rates
The VA guaranty gives lenders a greater degree of safety and flexibility, which typically means a more competitive rate than non-VA loans.
Increased Risk for Lenders
Without government backing, banks are taking on more risk which, in turn, can result in a less-competitive interest rate on your home loan.
VA loans require no down payment or private mortgage insurance. They feature competitive rates and terms and allow buyers to purchase a home with little to no money out of pocket.1. No Down Payment
Saving money and building credit can be difficult for service members who are constantly on the move. With the VA Loan, qualified borrowers can finance 100 percent of the home's value without putting down any money. Take a look at the chart below to see how much you can save through the no-money-down benefit of the VA Loan.
Many conventional lenders require borrowers to pay private monthly mortgage insurance (PMI) unless they're able to put down at least 20%, which can be difficult.
With a VA Loan, however, there is no PMI. This VA Loan advantage saves you thousands of dollars over the life of your mortgage.
Because the VA backs each VA Loan with a guaranty, financial institutions carry less risk and can offer interest rates that are typically 0.5 to 1 % lower than conventional interest rates.
Savings from a 0.5% reduction in interest
Savings from a 1% reduction in interest
Myth 1: I only can utilize my VA benefit for my initial house.
There are multiple situations where you might reuse your VA entitlement in order to secure a housing loan, according to VA guidelines:
Entitlement that was previously utilized in conjunction with a VA housing loan might be restored underneath specific circumstances. When restored, it could be utilized again for additional VA Loans. Restoration of previously utilized entitlement is probable if:
Myth 2: I have a foreclosure or bankruptcy upon my credit history, and thus am not qualified for a VA loan.
A bankruptcy within an applicant’s (or a spouse’s) credit history doesn’t in itself disqualify a loan, according to VA guidelines. A good credit history especially after the bankruptcy and length of time since the bankruptcy can be contributing positive factors towards still qualifying.
Myth 3: I do not have a full 2 years of service, therefore I am not qualified.
This isn’t necessarily the truth across the board. As a general rule of thumb for eligibility, the Veteran handbook reports that a veteran is qualified for VA housing loan benefits if she or he served on active duty within the Coast Guard, Marine Corps, Air Force, Navy, or Army was discharged underneath conditions other than dishonorable following either: ninety days or more, any portion of which happened within wartime.
Two-Year Requirement: A longer length of service requirement has to be met by veterans who:
Those veterans have to have either completed:
Call us today for more information on how the VA loan may be a great option for you!Military Homes Charleston We specialize in helping military families enjoy a smooth PCS in and out of Joint Base Charleston, South Carolina. Buying and selling your home is one of the biggest events of your life. As your trusted Charleston Real Estate Professional, we are 100% committed to helping you the best way we can when you buy or sell your home. We have a passion for helping people, and we love what we do – call 843-410-8014 or email today!