Home Buying with a VA Loan
Helping You Get the Most Out of Your VA Loan Benefits
The VA Loan Program has many benefits that can't be found with any other traditional loan. Which is why every month, thousands of families take advantage of their VA Loan Benefits. A VA Loan will:
What does this all mean? All of these extra VA benefits, add up to big savings over the life of the loan. In
one case, a family with a $215,000 mortgage saved $243 dollars per month and over $26,000 over the life of the loan.
- Save you hundreds of dollars every month, by eliminating the need for PMI (private mortgage insurance) which is an exrta monthly expense required with conventional loans.
- Allow you to purchase a home with $0 down. Most other loans require as much as 20% down.
- Lower your interest rate. VA Loans typically have lower interest rates than can be found with any other loan program.
Do you qualify? How much will you save? If you are interested in learning more about what a VA Loan can do for you get connected with a VA Loan Specialtist. A VA Loan expert will review you situation and build a customized solution for you and let you know what you qualify for.
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How a VA Loan Will Lower Your Monthly Payment
With a VA loan, there are really two forces at work that will significantly lower your monthly payment, the elimination of PMI and a reduction in your interest rate. Of course credit score, loan amount and and down payment will vary the amount saved, but monthly savings with a VA Loan are typically $175-$350 per month when compared to a conventional loan.
A typical mortgage will have an added extra expense called "PMI" which stands for "Private Mortgage Insurance". PMI is extra insurance that lenders require from homeowners that borrow more than 80 percent of their new home's value. Unless you put down 20%, you will be required to pay this added fee which is typically $100-$200 per month.
Because a VA Loan is backed by the Government, not a bank, the requirement for PMI is eliminated, saving you this added monthly expense.
Lower Interest Rate
Another major advantage of a VA Loan is the interest rate reduction typically seen over other loan types. When banks lend money they use the interest rate to protect themselves against the risk they take should someone default on their loan. This is why banks vary interest rates by credit score, lower rates for good credit (less risk), higher rates for poor credit (higher risk).
A bank's risk is significantly diminished with a VA Loan because the Federal Government backs the loan in the case of default. When a bank's risk is lowered, they lower their rate. Interest rates will vary based on your credit score, but typically, no matter what your credit score , the interest rate will be anywhere from 0.5%-1.0% lower with a VA loan.
It All Adds Up
On a $250,000 loan a 0.5% difference in interest rate will lower your monthly bill $77. That, combined with eliminating the monthly $166 PMI payment adds up to significant savings every single month.
| Monthly Savings Based on a $250,000 Loan |
|.05% Interest Rate Reduction:||$77|
|Total Monthly Savings:||$243|
This could be money saved every month or it will allow you to purchase a larger home for the same monthly payment. In this example a family could purchase a $285,000 home with a VA loan and have the same payment as if there were to purchase a $250,000 home with a conventional loan. Interested in learning more?
Get Connected with a VA Loan Specialist to See How Much You Can Save
Buying Your First Home?
The VA Loan program is tailored for first time home buyers. The biggest benefit for first time buyers is the ability to purchase a home with $0 down. The main barrier to home ownership for many young families is coming up with the down payment. Now more than ever banks are requiring large down payments, many loan programs require 10-20% down, putting home ownership out of reach for many first time home buyers.
A VA Loan is perfect for young families and first time home buyers because the borrower can finance 100% of the home's value and purchase with $0 down. There is no other loan program available that can offer this same benefit.
Because many first-time home buyers typically don't have a lot of established credit, getting qualified for a conventional loan can be difficult. The credit and income standards aren't as strict with a VA Loans making the loan qualification process easier. The less strict qualification guidelines will also allow you to get qualified for a larger home.
Interested in learning more about what a VA Loan can do for you? Fill out a short form to send your information to a VA Loan expert, who will review your situation and let you know what your options are.
Get Connected with a VA Loan Specialist
Does "$0 Down" Mean I Pay Nothing?
Well, not quite, there are still closing costs and fees associated with the purchase of any home. Closing costs are typically $1500-$3000 and are usually negotiated with the seller of the home.
But there are significant cost savings with a VA Loan, because, outside closing costs, you are not required to put any money down on the home you are purchasing. Most loans programs require a minimum of 5% down (which would be $12,500 for a $250,000 home). In many cases, particularly in today's economy, banks are asking for as much as 10-20% down ($25,000-$50,000 on that same home).
Do You Qualify for a VA Loan?
Generally speaking, almost every Veteran is eligible for a VA Loan. Your eligibility primarily depends on the amount of time you served. For active duty service members you must have served at least 90 days during wartime or 181 days of continuous service during peacetime.
For the Reserves and National Guard you are eligible after 6 years of service. If while a member of the Reserves or National Guard you were activated, you will fall under the same guidelines as an active duty member mentioned above.
Service members who have been dishonorably discharged are not eligible.
The spouse of a Veteran may also be eligible if the Veteran's death was a result of a service related cause or the Veteran is listed as MIA or was a POW for more than 90 days.
How To Get Started
Simply answer a few questions and you will be connected to a VA Loan Specialist. They will contact you to discuss your options and are available to answer any questions you may have. There is no obligation and your credit will not be pulled as a result of sending in an inquiry.
The 5 steps in the VA Loan Process
Step 1 - Pre-Qualification
Take this step by answering a few questions. A VA Loan Expert will then contact you and let you know what you qualify for. They will work with you to get pre-qualified for a VA Loan.
Step 2 - Become Pre-Approved
Once you get pre-qualified you will need to get pre-approved. You will have to fill out quite a bit of documentation but your VA Loan Officer will assist you every step of the way. This paperwork is necessary to get your pre-approval letter. A pre-approval letter will give you a big advantage in the market and allow you to quickly put in an offer when you find a home.
Step 3 - Determine VA Eligibility
Once all your documentation has been received, your VA Loan Officer will use a copy of your DD-214 to request your Certificate of Eligibility from the VA. You Loan Officer will be able to place this request electronically to the VA which will save a lot of time and will make the process very smooth.
Step 4 - Underwriting
Once you find a home, make an offer and have it under contract, a government underwriter will work with your VA Loan Officer to review the documentation that youâ€™ve provided and work to obtain a VA guaranty on your loan. Once all necessary documents have been received and signed off on, the underwriter will give final approval on your VA loan.
Step 5 - Final Paperwork
Once your loan has been approved by a government underwriter, you VA Loan Officer will schedule your closing. At closing, you will sit down and sign the paperwork that will finalize your VA loan. Congratulations, you are the proud owner of a new home!
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