Service persons and veterans may qualify for a VA Loan that requires no down payment. VA loans are guaranteed by the U.S. Department of Veterans Affairs. In addition to no down payment, these loans usually offer a competitive fixed interest rate and limited closing costs. While the VA does not issue the loans, it does issue a certificate of eligibility required to apply for a VA loan.
Benefits of a VA loan include:
- No down payment required
- Competitive interest rates are available
- Closing costs are comparable – and sometimes lower – than conventional financing types
- No monthly private mortgage insurance is required
- VA mortgages can be “assumed” by the new buyer when the home is sold (this may result in loss of the use of a VA loan an a future home)
Although mortgage insurance is not required, the VA charges an upfront funding fee of up to 3.3% of the loan amount. The fee may be paid in cash by the buyer or seller, but most often it is financed into the loan amount.
A VA loan can be used to buy a home, build a home and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.
A Certificate of Eligibility from the VA must be issued by the VA and presented to us to determine eligibility for a VA loan.
At First Nations Home Mortgage we answer questions about VA loans every day. Consultations are always free! Call today to learn more.