There are many advantages and virtues to having your loan guaranteed by the Department of Veterans Affairs. The first and most simple fact involved is that quite frankly, as a veteran you've earned this benefit. So taking advantage of what you've earned should be an easy choice overall. But in order to de-bunk a few of the myths and rumors surrounding the VA loan program, I've compiled this list of associated benefits.
-First, there is NO down payment. This is because the VA will guarantee (In most cases) up to 100% of the established reasonable value of the property. The exception to this is that due to secondary market requirements, VA loans generally do not exceed the Freddie Mac conforming loan limit for a single family residence (usually circa 360,000, or 540,000 for Alaska, Hawaii, Guam, and the U.S. Virgin Islands).
-The VA also offers you the flexibility to negotiate your interest rate with the lender -- meaning that lenders will need to compete on rates and terms to get your business.
-Under the VA there is NO monthly mortgage insurance premium to pay.
-There are set limitations on the total closing costs to you.
-The appraisal is required to inform you of the home's value.
-You can get a thirty year loan with a choice of repayment plan, to include:
Traditional Fixed Payments - Constant principle and interest; increases or decreases may be expected in property taxes or homeowner's insurance coverage.
Graduated Payment Mortgage (GPM) - Consists of low initial payments that gradually rise to a level payment beginning in the sixth year.
Growing Equity Mortgages (Available in SOME areas) - Consist of gradually increasing payments with all of the increase applied to principal, resulting in an early payoff.
Hybrid Adjustable Rate Mortgage (HARM) - Effective until September 30, 2008.
Traditional Adjustable Rate Mortgage (ARM) - Effective until September 30, 2008.
-On most VA loans for proposed construction, construction is inspected at certain stages to ensure compliance with approved plans.
-VA mortgages are assumable, subject to lender or VA approval of the assumer's credit.
-You have a right to prepay the loan without paying a penalty.
-The VA performs personal loan servicing and offers financial counseling to help veterans avoid losing their homes during temporary financial hardship.
To find out more specifics on VA guaranteed loans, visit VArefiCENTER.com
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