Among all the options for financing a home, two common loan options are VA and FHA loans. Take a look at these two articles for more details about these programs.
As always, if you have more questions, please feel free to contact your financial institution or one of our agents. The agents at Action Realty are experienced in working with Veterans and their housing needs. Contact one of our agents today!
Do you qualifiy for a VA loan? VA Loans are currently classified as the #1 Loan type for consumers by mortgage lenders. There are a few guidelines that must be met to qualify. Local lenders and mortgage companies approved to handle VA loans will write your mortgage. A VA loan is guaranteed by the Veterans Administration (VA). To the lender, a VA loan means that the loan is protected against loss should the borrower fail to repay the loan. To the borrower, a VA loan carries a significantly lower interest rate, lower fees, and little to no downpayment expectations. If you qualify, you should apply for a VA loan.
VA Loan Advantages:
- No Down Payment Required
- Reduced Interest Rates
- 30 and 15 Year Fixed Loans
- No Mortgage Insurance premium
- Limited Closing Costs
- No Prepayment Penalty
You might qualify if you meet any of these criteria:
- Currently active in the military for the US Armed Forces.
- A veteran who has served in the US Armed Forces and has an honorable discharge.
- A reservist/national guard member.
- An eligible surviving spouse of a soldier.
Why go for a VA mortgage loan? VA mortgage loans can be guaranteed with no money down and there is no private mortgage insurance requirement.
Most Mortgage companies have an active VA Loan program. They run promotions from within the mortgage company to provide extra services for the Veteran in search of a Home Mortgage. Many Lenders run very lucrative promotional benefits for Veterans within the VA loan package. Contact your lender and see what they offer with their VA Loan package. Don't be afraid to shop around and make sure you get the best loan package for your needs.
What is an FHA loan? FHA Loans are insured by the Federal Housing Administration (FHA). This means that if you default on an FHA loan, the Federal Housing Commission ensures the mortgage lender against any losses. Mortgage lenders like FHA loans. Why do consumers like FHA loans?
Since the loan is insured, the lender can offer you good terms including:
- A low down payment (as low as 3.5% of the purchase price)
- The financing of some closing costs (which means they are included in the loan amount), and
- Low closing costs.
- MIP (Mortgage Insurance Premium) must be paid as part of the FHA Loan. It is the FHA equivalent of PMI's in conventional loans.
An FHA loan is often easier to qualify for than a conventional mortgage and anyone can apply. However, FHA loans have a maximum loan limit that varies depending on the average cost of housing in a given region. If you would like to learn more about FHA loans, CLICK HERE!