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6 Facts About VA Loans That You May Not Know

Are you thinking of buying a home? If you’re a veteran or active military personnel, you may be eligible for a VA loan. And the great news is, for those who qualify, VA loans offer some of the most enticing and flexible benefits available. Whether you’ve been researching this mortgage option for months or you are just getting started, here are 6 facts about VA loans that you may not know.

1. VA loans allow veterans to buy a home with little or no money down

VA loans require no down payment, making it easier for veterans to become homeowners.  Perhaps just as importantly, the VA limits what fees and costs veterans can pay at the time of closing (they will not pay an “underwriting” lender fee for example). For other allowable closing costs like title insurance or appraisal fees, the veteran homebuyer can ask the sellers to pay all of their closing costs totaling up to a maximum of 4 percent of the purchase price. This can even include things like prepaid taxes and insurance, collections, and judgments. – Choice One Mortgage

2. Closing costs for VA loans are lower compared to other mortgage types

As mentioned above, one of the biggest benefits of a VA loan is that the VA limits the amount veterans have to pay in closing costs. Some financial institutions even offer closing cost reductions for qualified applicants. – F&M Bank

3. You can still get a VA loan while serving overseas

One of the more interesting facts about VA loans is that military members serving overseas can grant power of attorney (POA) to a spouse or someone else to sign the loan documentation for them. There is a 60-day occupancy rule, but only a spouse can satisfy that. Otherwise, an extension of up to 12 months is granted to the borrower. – Park Place Finance

4. If you have full entitlement, you won’t have a home loan limit

If the veteran has full entitlement, there is technically no limit on the loan amount and there will be no down payment required. It is important to note that if you do not have full entitlement (either through compromise or another VA loan) then the “old school” rules apply and down payments will potentially be required based on the loan amount. – Jennifer Guidry

5. VA loans do not require private mortgage insurance

Private mortgage insurance is required on all other mortgages when the borrower does not provide 20 percent of the sales price in the form of a down payment. This is an additional cost that VA home buyers do not incur in their monthly mortgage payments – Dylan Langei Home Loans

6. There are a variety of VA loan products available

From purchase, refinance, and home construction options to financing for manufactured homes (including singlewides), there are a wide variety of VA loan products to choose from. The VA even offers a streamlined refinance product (called an IRRRL), which provides a fast refinance from one VA loan to another, lowering monthly payments. Additionally, under this “IRRRL” program, some lenders do not require an appraisal, income, or credit check. – eLEND

Originally published by Redfin