Have you served in our country’s military? If so, did you know you might qualify for a loan with zero down payment through the VA loan program? Backed by the US Department of Veterans Affairs, VA loans offer a road to affordable home financing for eligible applicants.
Because the VA insures these loans, interest rates are low, and lenders are willing to extend great benefits to homebuyers. But there are a few things you may not know about VA loans. Let’s go over some of them now.
VA Loan Tips in Florence, AL
- The home you want to purchase will need to qualify. To finance a home purchase in the Tri-Cities using a VA loan, you will need to be buying a residence which qualifies. This means that it will need to conform to the VA loan limits for Colbert County. For a single-family home in 2018, that limit is $453,100. The house you want to buy will need to be your primary residence, and it will need to be in great condition. Houses which require a lot of repairs are typically not approved for financing.
- You can get a VA loan now even if you have used one in the past. You might assume a VA loan is a single-use benefit, but, you can use VA loan benefits repeatedly. So, if you have already purchased a home at some point with a VA loan (whether in the Tri-Cities or elsewhere), that does not prohibit you from doing so again now.
- If you have been foreclosed on or you have filed for bankruptcy, you might still be able to get a VA loan. Some homebuyers assume that they cannot qualify for a VA loan if they have had financial difficulties which have left black marks on their records. But these do not stand in your way so long as enough time has passed. This is even true if the home which was foreclosed was purchased using a previous VA loan.
- Mortgage insurance isn’t required. With other government-backed home loan programs, mortgage insurance is often a requirement. Say for example that you were going to buy a home with an FHA loan. This would require you to take out mortgage insurance if you opted for the 3.5% down payment. This may lead you to expect the same from VA loans in the Tri-Cities. But VA loans work differently. First, a down payment is not required at all. Secondly, you do not need to purchase mortgage insurance—even with that zero-down payment. This can save you a ton of money over the lifetime of your loan. How much? Well, you can likely expect to pay more than $100 a month for mortgage insurance on most homes. If you’re going to be paying on your house for the next 20-30 years, that literally adds up to tens of thousands of dollars. So being able to avoid paying this extra expense while still putting zero down on a new home is a fantastic benefit of a Tri-Cities VA loan.
- You do have to pay a funding fee (usually). While most of the surprises associated with VA loans are good ones, one which you may not be so pleased about is the funding fee which applies when your loan is initiated. At the lower end, the VA funding fee is usually around 0.50 percent. At the higher end, it might be about 3.3%. If, however you have a disability sustained in the course of duty, you may not have to pay this fee. If you are still serving, and are not receiving disability benefits, but would qualify to receive them, you also may be able to avoid paying the funding fee. The same goes if you are on retirement benefits.
- VA loans aren’t just for veterans. One more thing which you may not be aware of concerning VA loans is that they are available not only for veterans, but also for people who are still currently active in the armed forces. So long as you have served for the minimum amount of time required to be eligible for the loan, you should be able to apply successfully, regardless of whether you are still serving or not. You might also be able to purchase a home with a VA loan if you are a qualified surviving spouse of a military veteran. You do not need to have served.
American Pacific Mortgage, Inc. Inc. Can Help You Determine If You Qualify for a VA Loan
We have assisted customers throughout the Tri-Cities to apply for VA mortgages with zero down payment, no mortgage insurance requirement, and affordable interest rates. Wondering if you might be eligible? We can help you find out. Give us a call at (205) 495-0313, and we will schedule a consultation. Let’s get you into your new Tri-Cities home!
