What is the Difference Between a VA Loan and a Conventional Loan

A VA LOAN & A CONVENTIONAL LOAN

Veterans Affairs (VA) loans are one of several benefits offered to veterans and military personnel to help them become homeowners whether they’re in the service or returning home from active duty.

Obtaining a loan through the VA can be confusing for service men or women, and they don’t often understand how they differ from conventional loans.

Get the facts here and learn the process that can lead to you becoming a homeowner.

OVERVIEW OF VETERANS AFFAIRS LOANS

VA loans are loans offered to military personnel and their spouses to assist them in purchasing homes for home occupancy.

The borrower is getting the money from a bank, but the Veterans Affairs acts as the guarantor, so there is less risk for the bank.

In the case that the veteran were unable to continue making the payments, the government will pay for the loan.

These unique loans help many individuals become homeowners because of their favorable terms.

Veterans Affairs loans generally offer: • Low interest rates • No down payment • No mortgage insurance requirements

• Various terms and lenient application requirements

They’re available as: • Adjustable Rate Mortgages (ARM) • Fixed Rate Mortgages (FRM)

• Hybrid Mortgages

WHAT THE PROCESS ENTAILS

Purchasing a home through the VA is typically simpler than obtaining a conventional loan.

Below is the complete process of obtaining a home loan through the Veterans Affairs from beginning to the final step.

Realtors want buyers to be qualified prior to looking for a home. The best way to do this is to contact a loan originator who specializes in VA loans.

• Veteran obtains home loan approval from the Veterans Affairs.

• The veteran chooses a VA-approved lender.

• Veteran provides lender with Certificate of Eligibility and completes a loan application.

• At this point, the lender will verify income, obtain credit information and request the lender will notify veteran if he or she is approved for the loan. • Veteran finds the home he or she wishes to purchase.

• The veteran signs a purchase contract with the seller.

• A VA approved appraiser is hired to assess the value of the home. • A home inspection is performed.

• Veteran and lender meet to sign closing documents, which include mortgage, loan and related documents.

• Loan documents are sent to the Veterans Affairs for guaranty.

• Veteran can move into the home.

HOW VA LOANS DIFFER FROM CONVENTIONAL LOANS

Not all mortgages are created equal, particularly when you’re comparing conventional loans with government-backed loans like VA mortgage loans.

Here are a few of the many ways these two loans differ. • While both loan types are obtaining money from banks, credit unions or mortgage companies, the VA guarantees veteran loans.

• Unlike conventional mortgage loans, which usually require a 20 percent down payment, these loans usually require no down payment.

• Banks assume less risk with government-backed loans, so qualification standards are more lenient than with conventional loans.

• Because of the guarantee from the government, veteran loans do not require mortgage insurance. • There is less chance of foreclosure with veteran loans.

BENEFITS OF VA LOANS

There are many reasons why military personnel choose to get mortgage loans through the Veteran’s Administration.

Besides the fact that the loans are aimed at service members, they also come with many benefits.

• They do not require private mortgage insurance.

• They seldom require a down payment.

• They can be paid off early without a penalty.

• Interest rates are typically lower.

• Mortgage is assumable.

• Fewer closing costs are involved.

• Veterans Affairs offers foreclosure advocacy for individuals suffering financial difficulties.

• Veterans Affairs offers foreclosure advocacy for individuals suffering financial difficulties.

Mortgage Originator JimmyVercellino, specializing in VA loans, helps veterans use their VA loan benefit to their greatest advantage.

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