What is a Veteran's Affairs Loan?
A Veteran's Affairs Loan is also called a VA loan. This a government backed loan that is very popular among members of the military service. Eligible service members, surviving spouses and veterans can buy a home with 100% financing.
Investopedia defines a VA loan as “A mortgage loan program established by the United States Department of Veterans Affairs to help veterans and their families obtain home financing. The Department of Veterans Affairs does not directly originate VA loans; instead, they establish the rules for those who may qualify, dictate the terms of the mortgages offered and insure VA loans against default.”
VA Home loans are provided by private lenders, such as banks and mortgage companies. The VA guarantees a portion of the loan, which therefore enables the lender to provide more favorable terms.
Unlike FHA loan and conventional ARM loans, VA loans offer only fixed interest rate loans. A fixed rate VA loan protects you from rising interest rates for the term of the loan. In addition, your loan payment won’t change. However, property taxes, homeowner’s insurance premiums and homeowner’s association fees (HOA) can fluctuate.
What makes a VA loan unique is that borrowers don’t need a down payment. They can put down a lower down payment like the FHA loan. The other advantage of a VA loan over a FHA loan is there isn’t a requirement of Private Mortgage Insurance (PMI) or Upfront Mortgage Insurance Premium (UMIP).
The difference between a 30 year term loan and a 15 year term loan:
VA loans are offered in 30 year terms or 15 year terms. A 30-year loan is more common as it offers a lower monthly payment, although you pay more interest over the life of the loan. A 15-year loan often offers a lower interest rate, whereas you pay less interest over the life of the loan, but your monthly payments will be a lot higher.
NO MONEY DOWN - 100% financing available
NO income limits
NO limit to seller paid closing costs
NO Mortgage Insurance
VA funding can be financed
VA benefits are reusable
Seller concessions allowed (ask your mortgage loan originator for details)
Branch NMLS ID# 208516
Note: Integrity Home Mortgage Corporation is not affiliated with or acting on behalf of or at the direction of the VA or the Federal government.