VA Home Loans
VA Home Loan Program for the men and women who protect our freedom- With more than 25.5 million veterans and service personnel eligible for a VA mortgage, this loan is extremely attractive to those who qualify and the advantages are endless. Eligibility for a VA home loan can be defined as Veterans who served on active duty and have a discharge status of anything but dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peace time.
- Guaranteed by the government. Both VA home loans and VA streamline refinance mortgages are guaranteed by the U.S. Department of Veteran Affairs
- Borrow up to the VA Loan Limit of $417,000 with no down payment. VA Loan above $417,000 are allowed with a down payment
- The seller is allowed to pay reasonable closings costs. Most veterans go to closing without any out of pocket expense.
- Lower monthly mortgage payments. With no monthly Private Mortgage Insurance required (PMI)
- Easier credit criteria. For a purchase transaction you need to have a minimum of a 620 mid FICO score. A 640 score is required for a refinance.
What is the history of VA mortgages?
In 1944 VA home loans became known through the Servicemen’s Readjustment ACT which is also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt. This bill was intended to provide veterans with a federally guaranteed home with no down payment. The idea behind the no down payment feature was to assist veterans and their families achieve the reality of becoming a home owner. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation’s economy.
What is the VA Funding Fee?
The VA Funding Fee is paid directly to the Department of Veterans Affairs and is the reason they can guarantee this no-money-down loan program. This fee is paid so that VA eligible borrowers can enjoy loan benefits such as $0 down financing and no Mortgage Insurance payments.
How is the VA Funding Fee paid?
The funding fee does not have to be paid separately and is usually rolled into the loan. This allows people to take advantage of the $0 down benefit of the VA home loan.
VA Funding Fee Exemption
If a borrower is receiving disability payments from the VA or are considered at least 10% disabled, they are exempt from paying the VA Funding Fee.
VA Funding Fee Chart
The Funding Fee is calculated by looking at 5 different factors, loan amount, loan type (purchase or refinance), type of service, down payment (if any) and prior VA loan use.
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