More than 29 million veterans and service
personnel are eligible for VA financing. Even though many veterans
have already used their loan benefits, it may be possible for them
to buy homes again with VA financing using remaining or restored loan
entitlement.
Before arranging for a new mortgage
to finance a home purchase, veterans should consider some of the advantages
of VA home loans
Most important consideration, no downpayment is required in most cases.
Loan maximum may be up to 100 percent of the VA-established reasonable
value of the property. Due to secondary market requirements, however,
loans generally may not exceed $240,000.
Flexibility of negotiating interest rates with the lender.
No monthly mortgage insurance premium to pay.
Limitation on buyer's closing costs.
An appraisal which informs the buyer of property value.
Thirty year loans with a choice of repayment plans:
a. Traditional fixed payment (constant
principal and interest; increases or decreases may be expected in
property taxes and homeowner's insurance coverage);
b. Graduated Payment Mortgage--GPM (low initial payments which gradually
rise to a level payment starting in the sixth year); and
c. In some areas, Growing Equity Mortgages-GEMs (gradually increasing
payments with all of the increase applied to principal, resulting
in an early payoff of the loan).
For most loans for new houses, construction is inspected at appropriate
stages to ensure compliance with the approved plans, and a 1-year
warranty is required from the builder that the house is built in conformity
with the approved plans and specifications. In those cases where the
builder provides an acceptable 10-year warranty plan, only a final
inspection may be required.
An assumable mortgage, subject to VA approval of the assumer's credit.
Right to prepay loan without penalty.
VA performs personal loan servicing and offers financial counseling
to help veterans avoid losing their homes during temporary financial
difficulties.
VA Home Page
