Considering a VA Loan
What is a VA Loan?
Lenders make VA-guaranteed loans to eligible veterans for the purchase of a home. The loans are guaranteed by the Veterans Administration (VA) for eligible veterans who wish to purchase a home. If you fail to repay the loan, the lender is protected by the guaranty. Generally, VA guaranteed loans do not require a down payment, and the borrower usually receives lower interest rates than other types of loans.
What Are the Advantages of VA Loans?
Among the other benefits of a VA loan are:
- There is no requirement for private mortgage insurance.
- Loans may be prepaid without penalty.
- Upon selling a home, the buyer can assume the mortgage.
- For veterans in financial difficulty or at risk of defaulting on their loans, counseling and assistance are available.
Despite no requirement for mortgage insurance, the VA charges a funding fee in order to issue a guarantee to a lender in the event of a borrower default. Fees may be paid in cash by the buyer or seller, or they may be financed as part of the loan amount.
It is possible to use a VA loan to purchase a home, build a home, or even improve an existing residence with energy-saving features such as solar panels or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors, and other energy-efficient upgrades approved by the lender and VA.
To qualify for the loan, the VA must provide a Certificate of Eligibility to the lender.
Questions about VA loans? Contact Omni today at (603) 893-6616!