Facts You Should Know About VA Loans
How does VA Serve American Veterans in Home Lending?
The Veterans Administration offers mortgage purchase and refinance loans for Veterans across America. Here are some of the most common things that most people don’t know about VA loan programs:
1. VA loan are specifically designed to help veterans purchase single family residences or condominiums which are in move in condition. They are not available for those wanting to start businesses or be used for fixer-upper, style homes.
2. If you are trying to buy an investment property, than, a VA Loan is not right for you. Remember, only primary residences fit this loan type.
3. People often think that the Veterans Administration actually distributes the VA loans to the veterans. This is not true. You obtain your VA loan under the umbrella of the HUD (Housing and Urban Development) and underwritten by lenders and banks across America. So, contact a LendPlus Financial loan officer to help you get started if you are a veteran wanting to benefit from this type of loan program.
4. Are VA loans guaranteed by the federal government? Yes, partially! The banks and lenders across the country administer the loans to the veterans and the federal government provides partial insurance to protect the interest on behalf of the lender. The lenders take most of the risk. The risk that lenders like LendPlus Financial take on with providing loan of this kind are well worth it, just like any other loan which lenders offer to clients.
5. They’re available despite bankruptcy or previous foreclosure. Veterans with a history of foreclosure or bankruptcy can still secure a VA loan. Each borrowers who have ad a VA loan foreclosed on can still apply for a VA loan and utilize their home loan benefit.
6. VA loans come with a mandatory fee. There is a VA funding fee which is usually 2.0% funding fee, which is 2% of the loan amount. This fee helps the VA to offer this program to everyone who is a veteran. This fee can be “rolled” into the loan. Those veterans with disabilities can have the fee totally, waived when purchasing or refinancing a home loan.
7. Do VA loans have limits on Co-borrowers? Only a spouse can be on the loan as co-borrower. No one else.
8. Do VA loans have a MIP fee? No, the insurance provided under this loan is enough to cover any losses and insure the loan to the benefit of the lender providing the loan.
9. Does a VA loan have a prepayment penalty? No, you can make as many payments you choose over the term of the loan.