If you are getting ready to buy your first or tenth house, you should shop around and evaluate different types of loan programs before selecting the right one for your situation. There are many loan programs to choose from, and each program is designed for a different purpose. If you are a veteran, you may find that the most beneficial loan program for you would be a VA loan. Here are several things you should know about VA loans.
What Is A VA Loan?
A VA loan is a type of loan program available for anyone that served in the military in this country. This type of loan is offered through private lenders, but it is backed by the Department of Veterans Affairs. This department created these loans to help current military workers, their spouses, or those that served in the military in the past afford to buy homes. If you meet this criterion and want to purchase a home, you may want to talk to a lender about getting a VA loan.
What Are The Benefits Of VA Loans?
There are several key benefits of choosing a VA loan over other options, but one of the top benefits is that you may not need to put any money down to purchase a home. Most types of loan programs require a down payment of some kind, and the amount of a down payment is usually around 20% of the purchase price of the home.
For example, if you wanted to buy a house for $200,000, a typical loan program might require that you put $40,000 down when you purchase it. With a VA loan, you might not have to put anything down to make the purchase. If you do not have any cash for a down payment, getting a VA loan might be the only option you have for purchasing a house.
In addition to this benefit, VA loans typically offer a variety of other benefits too, and these include:
- You may be able to get a better interest rate than what other types of loans offer
- The VA sets a cap on the amount of closing costs you will have to pay
- You will not have to pay private mortgage insurance (PMI)
- You do not need perfect credit
These are all great benefits available to those who qualify for a VA loan, but you may wonder if it is hard to get a loan like this.
How Do You Get A VA Loan?
Getting a VA loan is really no harder than getting any other type of loan, but it will require one extra step. Before you can apply for a VA loan, you will need to make sure you qualify for this loan program, and you will need to get proof from the VA that you are eligible. The proof you need is called a Certificate of Eligibility (COE), and you can do this online or through the mail.
Once you have the document from the VA proving you qualify, you can take it to any lender that offers VA loans. You will then have to fill out the application and supply the lender with any forms of documentation they may need.
One thing you should know about VA loans is that they often do require paying an extra fee that you will not see with other loan types. This fee is typically around 2% of the purchase price of a house, and it is designed to keep the VA funded so it can continue helping other veterans.
Buying a house with a VA loan is a great option if you are eligible. To learn more about this loan program and others, contact a lender today. For more information, consider a website like http://www.firstmortgagecompany.net.