Whether you're getting your first home, or buying for the third or fourth time, understanding loans, mortgages or the financial elements of purchasing a home can be complicated. FHA loans and VA loans are typically easier to obtain for first-time buyers and have more lenient and versatile options.
VA loans are specialty loans reserved for veterans, current service members, surviving spouses and members of the Reserve or National Guard. There are stipulations on these, but in general, service members, veterans and members of the Reserve or Guard are eligible if they've been on active duty between 90 days and 24 months (please check with the Department of Veterans Affairs for more information). Surviving spouses of service members can generally qualify if they haven't remarried, or if they fall into a certain age bracket.
FHA loans are loans that are backed or insured by the Federal Housing Agency. The loans themselves are not given by the FHA, they are simply loans provided through approved lenders which the FHA promises to cover if the loan defaults.
Loans from an FHA approved lender allow borrowers to obtain down payments from other sources, which is atypical with conventional loans, and the interest rates tend to be lower. These loans are designed to enable families and individuals with weak credit and favor those with long time employment and job security. With an FHA loan, closing costs may also be rolled into the amount of the loan, provided the borrower is approved for the sum.
On the down side, FHA loans have higher mortgage insurance, and there are loan limits on the amount that can be applied for. Homes with an FHA loan must be owner-occupied, and they can sometimes take longer to process than standard loans, making you a less appealing candidate if multiple offers for the home are on the table.
While VA loans are available expressly for military personnel and their families, if you qualify to apply, there are several reasons you should seriously consider it. First, VA loans allow you to finance 100% of the home, meaning that there is no down payment for the home you are purchasing, freeing up any out of pocket money to spend on purchases for your move. Additionally, VA loans do not require mortgage insurance and the financial qualifications are quite relaxed when compared to other types of home loans. On top of everything else, VA loans are typically accompanied by some of the lowest interest rates available on the market.
While the disadvantages of a VA home loan are minimal, there are a few that exist. VA loans do have a cap on the amount of money that may be borrowed, making it difficult to qualify to purchase more expensive homes. Additionally, any fees associated with the purchase like closing costs, the cost of necessary repairs (as determined by a VA approved inspector), and funding fees (though these may be rolled into the bulk of the loan and are not due up front.)
Although there a lot of loans and a lot of programs out there, VA home loans are far and away the best choice. VA loans, VA refinancing and VA streamline loans are all options you can choose from, whether you're looking to buy or refinance a home. And best of all, they're just for you.
VA loans are specialty loans reserved for veterans, current service members, surviving spouses and members of the Reserve or National Guard. There are stipulations on these, but in general, service members, veterans and members of the Reserve or Guard are eligible if they've been on active duty between 90 days and 24 months (please check with the Department of Veterans Affairs for more information). Surviving spouses of service members can generally qualify if they haven't remarried, or if they fall into a certain age bracket.
FHA loans are loans that are backed or insured by the Federal Housing Agency. The loans themselves are not given by the FHA, they are simply loans provided through approved lenders which the FHA promises to cover if the loan defaults.
Loans from an FHA approved lender allow borrowers to obtain down payments from other sources, which is atypical with conventional loans, and the interest rates tend to be lower. These loans are designed to enable families and individuals with weak credit and favor those with long time employment and job security. With an FHA loan, closing costs may also be rolled into the amount of the loan, provided the borrower is approved for the sum.
On the down side, FHA loans have higher mortgage insurance, and there are loan limits on the amount that can be applied for. Homes with an FHA loan must be owner-occupied, and they can sometimes take longer to process than standard loans, making you a less appealing candidate if multiple offers for the home are on the table.
While VA loans are available expressly for military personnel and their families, if you qualify to apply, there are several reasons you should seriously consider it. First, VA loans allow you to finance 100% of the home, meaning that there is no down payment for the home you are purchasing, freeing up any out of pocket money to spend on purchases for your move. Additionally, VA loans do not require mortgage insurance and the financial qualifications are quite relaxed when compared to other types of home loans. On top of everything else, VA loans are typically accompanied by some of the lowest interest rates available on the market.
While the disadvantages of a VA home loan are minimal, there are a few that exist. VA loans do have a cap on the amount of money that may be borrowed, making it difficult to qualify to purchase more expensive homes. Additionally, any fees associated with the purchase like closing costs, the cost of necessary repairs (as determined by a VA approved inspector), and funding fees (though these may be rolled into the bulk of the loan and are not due up front.)
Although there a lot of loans and a lot of programs out there, VA home loans are far and away the best choice. VA loans, VA refinancing and VA streamline loans are all options you can choose from, whether you're looking to buy or refinance a home. And best of all, they're just for you.
About the Author:
Government Loan Pro is a VA and FHA mortgage broker and we can provide a wide variety of VA loan options for you and your family. We make it easy to find refinancing options for your VA home mortgage loans, great rates on purchasing loans, and we'll connect you to the mortgage lender who can answer your questions and help you make the decisions that fit your financial needs.
No comments:
Post a Comment