VA Mortgages have become very popular for purchasing a home or refinance. The program has more lienant guidelines than a Conforming Loan. The program typically comes in a 15 yr or 30 yr term. It only offers a fixed rate option.
VA has requirements for the property you are purchasing or refinance. Usually these requirements are items attached to the home have to be in working order and not cause a safety issue. The appraiser of the home determines whether a loan is acceptable for VA financing.
VA does not require a down payment. It is 100% financing on home purchases. You can also access 100% financing when refinancing. You do not have to have an existing VA Loan to refinancing. If you do have one and Interest Rate Reduction Loan is available which has laxed requirements and may reduce your funding fee.
The standard guideline for using a VA Loan to obtain Cash Out on a refinance is 90% of the appraised value. Temporarily VA allows 100% however it is rare to find a lender allowing it.
VA does not require mortgage insurance. They charge a funding fee which can be financed into your loan. Your first use is 2.25% of the loan amount. Every use thereafter is 3.3%.
Contact your local Department of Veterans Affairs facility and see if you are eligible for a VA Guarantee. They will issue a Certificate of Eligibility if you are. You will need this document to obtain your loan.
This certificate shows the amount VA will guarantee. It is called your entitlement.
VA requires you serve 2 years of active duty in the military. You must have an other than disshonorable discharge. The loan typically requires your overall debt to income ratio be below 41%. This loan is perfect if you have limited funds for down payment or simply do not want to use your funds at this time.
VA restricts lender fees to be no more than 1% of the loan amount.
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VA Purchase:
- No Down Payment Required
- Gift Funds Are Acceptable
- Seller Can Contribute Up To 6% Of The Purchase Price To Pay Closing Cost's
- Flexible Guidelines
- No Mortgage Insurance
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VA Refinance:
- 90% Cash Out (100% temporary and rarely available)
- 100% Rate and Term
- No Income or Property Location Restrictions
- Higher Debt Ratio Allowed
- More Flexible Guidelines
- You Do Not Have To Have An Existing VA Loan
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