VA mortgages are a great financing option for both first time homebuyers and current homeowners.
These types of loans have multiple benefits, including no down payment on purchases and no mortgage insurance.
The absence of these costs, which are required on most mortgages today, saves borrowers money for their other expenses.
Borrowers can also save money because this type of financing tends to have lower interest rates than other types of home loans.
Why Low Rates are Beneficial First time homebuyers or homeowners who are purchasing a new home and are eligible for VA financing can receive a low VA mortgage rate on their home loan.
Having a low interest rate will lower the borrower's monthly mortgage payment and save him or her money in the long run.
A borrower can use the money he or she saves for personal expenses or for other expenses related to the new home.
First time homebuyers can also use the $8000 first time homebuyer tax credit to maximize their savings.
The tax credit is slated to end in April, so first time homebuyers should consider taking advantage of this incentive now.
Obtaining lower rates by refinancing Current homeowners can refinance their existing VA mortgages in order to receive lower interest rates on their home loans.
There are a few different home-loan refinancing options homeowners can choose from.
With a lower interest rate, a homeowner can lower his or her monthly mortgage payment and save a great deal of money in the long run.
In addition to lowering one's interest rate and monthly payment, refinancing also gives homeowners the option to change the terms of their loans, consolidate debt and/or take cash out.
Requirements to Qualify To be eligible for this type of financing, the borrower must be either a veteran or a current member of the U.
S.
military.
If the borrower is a veteran, in order to qualify for a loan, he or she must have been discharged under conditions other than dishonorable.
There are certain other service length requirements that borrowers must also meet.
A home loan specialist can help potential borrowers determine their service eligibility.
In addition to service requirements, an applicant must meet a residual income requirement and have an acceptable debt-to-income ratio so that the lender knows he or she can make the loan's monthly payments.
The VA does not require that applicants have a high credit score, but most lenders will require a credit score of at least 620.
In some cases, a veteran or current service member's spouse may qualify for loan benefits in the event of a death caused by or related to military service or other special circumstances.
Disabled veterans who were disabled while in service or as a result of service may be entitled to additional loan benefits, such as being exempt from paying the loan funding fee.
They may also be able to receive accommodation grants that they can use to make their home more accessible for their disabilities, or they may be exempt from having to pay property taxes, depending on the laws in the state in which they reside.
This type of loan is a great financial solution for those who have served our country.
Borrowers can receive low interest rates, which will lower their monthly payments and leave them with more money for their other expenses.
The absence of mortgage insurance and a down payment (for purchases) saves borrowers even more money overall.
Interest rates are continually fluctuating, so now is a great time to take advantage of low VA mortgage rates to save money on home financing.