Mortgage Basic 101 - Veterans Administration Loan

Mortgage Basic 101 - Veterans Administration Loan

published on November 6, 2018 by Aidel and Yolanda Rivera

Veterans Administration

As part of the benefits that active military members and veterans receive from the government, VA loans are built on a merit-based system. Career military and those honorably discharged early are generally eligible, but short-term members or Reserves may have to meet additional requirements. Anyone who can get this loan will need to bring a Certificate of Eligibility in order to get the ball rolling with an approved lender.

In most parts of the country, veterans who qualify for the VA Loan can purchase a home worth up to $453,100 without putting any money down; however, with the 2017 VA Loan Limits, borrowers in high-cost counties may be able to purchase homes far exceeding that amount without a down payment.

The seller is allowed to pay up to 4% of the home price, of the veteran’s closing costs. So, it is possible to avoid paying anything out of pocket to buy a home.

Pros: Favorable interest rates, extremely flexible guidelines and absolutely nothing required as a down payment (often little to nothing required at closing!) There’s no mortgage insurance, just a one time “funding fee” that varies with your service type, down payment and times you’ve used your Eligibility.

Cons: Really, there aren’t any. You can’t get this if you’re not military, though, so that could be a con if you really wanted this most excellent loan type.

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