Considering A VA Loan? What To Know
If you are looking to purchase a home, there are a variety of options available to you when it comes to financing. While you may be mainly focused on finding a home in your price range that has the features you desire, it's also important to carefully consider your financing options. Paying attention and looking for the best possible option can save you thousands of dollars over the course of many years. One option that you may want to consider is a VA loan. This type of loan can mean big savings if you qualify. Here are three things to know about these loans.
Eligibility Requirements
The first thing that you should know about VA loans is that there are eligibility requirements that must be met. It's a little more complicated than just having served in the military or being married to someone who has served. Current active-duty members of the military can qualify for one of these loans after 90 continuous days of active service. If you are a member of the guard or are a reservist, you may qualify after 90 continuous days of active service or six years of Guard and Reservist service. Veterans may also qualify for a VA loan if they served for 24 continuous months after Aug. 2, 1990. Before applying, you will want to check the full eligibility requirements.
Rates Tend to Be Lower
Another thing that you should be aware of when making a VA home purchase in your area is that you are likely going to get a better deal on your loan. VA loan mortgage rates are around 0.25% lower than the rates on conventional loans. The requirements for these loans are also typically more lenient. Lenders are more likely to work with you, even if you have a lower credit score or have bankruptcy or foreclosure in your past.
No Down Payment Is Needed
Another benefit of VA loans is that no down payments are required and there is no private mortgage insurance like there would be with a conventional loan. However, it's important to note that there are still going to be lender fees, appraisal fees, closing costs, property taxes, and other costs that you will need to prepare for. VA loans also have funding fees that you have to pay that are determined by your service and whether or not you have a down payment. This fee ranges anywhere from 1.25 to 3.3% of the value of the loan.
If you are considering a VA loan, there are a few things that you should consider. First, it's important to look into the eligibility requirements in order to determine if you qualify for this type of loan. Rates for VA loans tend to be lower than those for conventional mortgages. No down payments are required, but funding fees do apply.
For more information, contact a company like Unity West Lending.
Share