If you are on active duty in the military or you're a military veteran who is in the process of purchasing a home, you should consider talking to your mortgage broker about qualifying for a VA home loan. There are several ways that using a VA loan to purchase your home benefits you. So, take some time to learn more about the benefits of a VA loan to see if it's a good option for you.
Down Payment and Mortgage Insurance
When you purchase a home using a conventional loan, you need a down payment that is equal to at least five percent of the total loan amount. However, if your down payment is less than 20 percent of the total loan amount, many mortgage companies add private mortgage insurance (PMI) to the loan. If you have a down payment equal to five percent of the total loan amount, the addition of PMI typically adds approximately $80 per month to your payments for every $100,000 you borrow. The good news is that if you qualify for a VA loan, you can finance the entire loan amount. This means you could purchase your home without any down payment at all — and you don't need to worry about PMI either.
Your Credit History
Conventional home loans typically require borrowers to have a credit score of at least 720 to qualify and receive a good interest rate. However, your mortgage broker can help you apply for a VA loan even if your credit is considered less than perfect. The VA loan program doesn't deny applicants based solely on their credit history. In fact, unless you have a bankruptcy, unpaid tax liens, or accounts that are in collections, the VA loan program typically only reviews the past 12 months of your credit history.
Assistance if You Have Financial Difficulties
While it's important to make your mortgage payments on time every month, regardless of whether you have a VA or conventional loan, the VA loan program has procedures in place to help borrowers who are struggling financially. If a problem arises and you can't pay your monthly mortgage payment, the VA can work with your lender to either modify your current home loan or get you put on a repayment plan so that you avoid foreclosure.
Buying a home is a major investment. It's not a decision that should be taken lightly. Once you decide you're ready to start the home buying process, contact a local mortgage broker, such as Premium Mortgage Corp, to start the application process for a VA loan.Share