Some Basics About VA Home Loans

  Since 1944, when home loan guarantees were part of the original GI Bill, the VA has guaranteed more than 18 million home loans worth over $911 billion. In 2008, 180,000 veterans, active duty service members, and survivors of veterans received VA home loan valued at about $36 billion. More than 90 percent of those VA loans were no-down payment loans.

    The VA Home Loan program allows veterans with qualifying income and credit to purchase a primary residence without putting any money down towards the sale price of the home, as long as that sale price does not exceed the appraised value of the home. Veterans do need money towards closing costs as well as earnest money, which the seller generally requires when a sales contract is signed. Closing costs may be paid by the seller, which can be negotiated when the sale price of the home is set.

      If 100% financing isn't enough, there are even more benefits to applying for your VA Home Loans for veterans who are ready to purchase a home:

• VA Home Loans are assumable, provided the person assuming the loan is qualified.
• Veterans' closing costs are limited by VA, making sure you won't be asked to pay more than a fair price for closing costs.
• You have the VA behind you offering additional assistance if you ever find you are having problems making your home loan payments, at any time in the future.
• Veterans can prepay their VA Home Loans without a penalty.

Check these facts about the purchase of your next home with a VA Home Loan:

• VA does not have a maximum VA Home Loan amount. However, lenders do sell loans on the secondary mortgage market, so they will generally limit loans to $417,000 ($625,500 in Hawaii, Guam, Alaska and U.S. Virgin Islands) with no down payment. With a down payment, your VA Home Loan may even exceed these amounts.
• The veteran does have to qualify income and credit wise.
• The veteran does have to occupy the home as their primary residence.
• The veteran does not have to be a first time home buyer and may reuse his/her benefit.
• The lender, not VA, sets the interest rate and discount points, so they may vary from lender to lender - shop around for the best rates as always.
• There is no private mortgage insurance, but VA does charge an up front VA funding fee, which may be financed. The exception would be if a veteran is in receipt of VA service disability payments each month; then, he or she does not have to pay a VA funding fee.
• With a VA Home Loan, the seller can pay your closing costs. There is a requirement that seller concessions do not exceed 4%, but only certain items are considered as part of the concession including payment of pre-paids, VA funding fee, payoff of credit balances or judgments on behalf of the veteran, and funds for temporary buydowns (not discount points).
• The veteran is not allowed to pay for a termite inspection report; it is paid for by the seller.
• VA does not approve the majority of loans. The majority of transactions are handled directly by the lender with little VA intervention.

Source: www.MilitaryHub.com