Are you thinking about buying a home but don't know the first thing about the type of loan to use? You may feel as if you are lurking in unfamiliar territory.
However, with a little bit of knowledge and research, you will feel confident enough to approach a lender about getting a loan.
You can also talk to a loan specialist, who will guide you through the process and help you determine the best route to take.
This article can help understand what type of loan is right for you.
It pays to know the difference between the various types of loans out there. For veterans, a VA loan can put you in the door of your dream house.
There are some stipulations as with any type of loan. The most important thing you will need to know is that, with this type of loan, the VA guarantees the lender against loss if there is a default on the loan.
In other words, a private lender such as a bank or mortgage company may be more likely to front the money for a veteran because of this guarantee.
With no down payment, and the seller able to foot a lot of the closing costs, it is a very affordable way for a home buyer to get their own place.
A Certificate of Eligibility is required to get this type of loan.
THE MANY BENEFITS OF A VA LOAN
One of the best benefits of this type of loan is no down payment is required. This is very helpful especially if you are a first-time home buyer and just starting out.
Some of the fees such as the VA Funding Fee can be financed so there isn't a lot of out-of-pocket expense. A big plus is there is no mortgage insurance premium which can make payments higher.
Fortunately, the VA does not require a buyer to purchase this type of insurance.
With a reasonable interest rate and the buyer’s interests at heart, lending via the Veteran’s administration may be the way to go.
WHAT ABOUT FHA?
First it will help to understand the workings of an FHA loan. Again, this type of loan is guaranteed but not by the VA.
It is guaranteed by the Federal Housing Administration. So, when you take out an FHA loan, just like the VA, they will guarantee to the lender the monies in case of a default.
The difference between an FHA and VA loan is the down payment. Where the VA requires zero down, the FHA requires at least 3.5% of the price of the home.
The FHA has low down payments and low closing costs. Also, it is much easier to qualify than with most other lenders.
WHAT DO YOU PREFER VA OR FHA?
Whether you choose a VA loan or an FHA loan, both have qualifying factors that can help you make a smart decision.
It all depends on your financial need at the time of your purchase.
Factor in the cost of the loan until it is paid, the interest rate and the amount of money up front.
This will help you make a smart decision as a buyer.
Mortgage Originator Jimmy Vercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage. Contact him for more information – he will guide you through the process.
Be a proud homeowner today. For more details call 480-351-5904 or visit the site www.valoansforvets.com
VA Loans for Vets 7600 E. Doubletree Ranch Road #200 Scottsdale, AZ 85258 Phone: (480) 351-5904 Email: jimmyv@fcbmtg.com