All You Need To Know About VA Loans
With more than 29 million veterans and service personnel being eligible, VA loans are one of the most attractive means of buying, owning or remodeling a property in the United States. Mentioned below is important aspects about VA loans that you should know in case you are thinking of applying for the loan.
Advantages: There are several advantages of a VA loan. Since these loans are guaranteed by the Veterans Administrations, interest rates are low. No down payment is required as lenders are ready to provide up to 100 percent finance. Origination, closing and appraisal charges are low for VA loans. Apart from having flexible repayment plans, VA loans also do not require any private mortgage insurance or PMI. Borrowers even have the benefit of repaying their loan earlier than the stipulated period as there is no prepayment penalty on VA loan.
Disadvantages: Any home purchased or constructed under VA loan requires inspection and warranty. As a result, realtors and sellers are often reluctant to sell homes to customers who have applied for VA loans. Applicants also need to pay an upfront fee that ranges between 0.5-3 percent depending on the down payment made by the borrower.
Applying for a VA loan: In order to apply for a VA loan, the applicant must have a Certificate of Eligibility. Other documents include the most recent discharge or service papers that indicate the service duration and also the type of discharge. Next part is to decide on the home that has to be purchased and sign a purchase agreement. Get the home appraised by a certified VA home appraiser and then apply for a VA loan with any of the VA-approved mortgage lenders. Bargain on the terms and conditions of the loan and finally close the transaction. Some closing costs that are usually charged by lenders include VA appraisal fee, credit report, loan origination fee, title search and insurance, recording fee, and survey charges.
Author: Pauline Go
Article Source: EzineArticles.com
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