What Is A VA Loan?
A VA loan is a mortgage loan in that allows those who have served in the US military or are presently serving to purchase a home. The loan is guaranteed by the United States Department of Veterans Affairs. The aim of the loan is to provide eligible veterans or surviving spouses with long-term financing. The program was established in 1944 by the US government to assist returning service members buy homes without requiring a down payment or excellent credit.
What Can A VA Loan Be Used for?
You can use a VA loan for buying or refinancing your current mortgage loan, which can be VA or non-VA. The types of property that you can buy include single-family homes and townhouses. Many homes and Myrtle Beach condos for sale allow for VA financing.
What Are the Benefits of A VA Loan?
One of the benefits of a VA loan is being able to buy a house without any down payment. You can get 100% financing, and this is possibly the main benefit. Although you may be required to pay a fee to the VA, an additional benefit is that you won't be bogged down with monthly Private Mortgage Insurance (PMI). You won't have any pre-payment penalties, and you can also enjoy lower interest rates.
What Types of Repayment Options Are available?
The VA guarantees thirty-year loans with a choice of repayment plans. You can choose traditional fixed payment, where the principal loan and interest remain constant. You can also choose graduated payment mortgage (GPM), in which the initial payments are low and then gradually increase to standard payments beginning in the 6th year. Growing equity mortgages (GEMS) are also available, and it's a fixed rate mortgage in which the monthly payments increase over time according to a predetermined schedule.
What Is the Maximum Loan?
Even though the VA loan program doesn't impose a maximum amount that can be borrowed, the maximum guaranty amount is set at $424,100 for 2017.
A Certificate of Eligibility is a requirement for everyone applying for a VA loan. You also need to document information about your savings, credit, and employment.
Can I Have a Co—Borrower Who Is Not a Veteran On My Loan?
Yes. Adding income and credit of a co-borrower to your application can help you to qualify for your maximum loan requirement. However, if the co-borrower isn't your spouse or a veteran like you, the guaranty will only apply to a veteran's stake, which is roughly half the loan amount. The VA guaranty will, therefore, be approximately 12.5 percent rather than the typical 25 percent.
For more detailed information about VA loans, qualifications, new rules, and how to apply. Please reach out to your Coldwell Banker Chicora Advantage Realtor, who would be more than happy to connect you with a mortgage professional that specializes in VA loans.