If you are a member of the United States Armed Forces, including the National Guard, you may qualify for VA Loans. VA Loans allow veterans of the United States Armed Services to get a residential mortgage loan with no money down. Veterans get now qualify for a VA Loans with no money down with a maximum loan amount of $417,000, unlike FHA loans, where the maximum loan amount is $271,000 unless the subject property is located in a high cost area.
VA Loans Versus FHA Loans
Many Veterans who had a certificate of eligibility had a hard time getting VA Loans in the past and had to resort to FHA insured loans instead, where it requires a 3.5% down payment. VA loans were somewhat tougher to get an approve/eligible per DU or LP FINDINGS in recent years versus FHA insured mortgage loans. However, VA loan programs have lightened up in recent months. FHA loans does not require that open collections be paid off. However, Fannie Mae and/or Freddie Mac normally required that open collections be paid off for VA loan programs on the Automated Underwriting System Findings. Those who had many outstanding unpaid open collections needed to resort to FHA loan programs when they got denied for VA loan programs via the automated underwriting system due to open collections or other derogatory credit.
Requirements For VA Loans
As long as you are a veteran and have the certifcate of eligibility paperwork, your can qualify for a VA loan with no money down, 100% financing, no mortgage insurance premium. There is a funding fee for VA loans which is similar like the FHA upfront mortgage insurance premium. The funding fee, normally 2% to 3%, can be rolled into the VA loan. There are many case scenarios where a Veteran can purchase a home with no money down. Sellers concessions is allowed which can cover all closing costs as well as pre-paids which are property tax and insurance escrows. Mortgage rates on VA loans are comparable to FHA loans which is currently at and/or about 4.25% on a 30 year fixed rate loan.
Advantage Of VA Loans Over Other Government Loan Programs
No money down and 100% financing is the best advantage of VA loans. Another major advantage of VA loans over FHA loans is that there is no monthly mortgage insurance premium. VA loan mortgage rates are hands down lower than any conventional mortgage loan programs. No mortgage insurance premium is a major plus. There is no funding fee for disabled veterans. The funding fee is waived. We can now approve VA loans for veterans with credit scores as low as 550 FICO. Open collections and other derogatory credit are dealt on a case by case basis. Manual underwriting VA loans is now allowed and for those Veterans who cannot get an approve/eligible per DU FINDING and/or LP FINDINGS can now request a manual underwriting on VA loans. VA mortgage loan lenders do require timely payments for the past 12 months. If you are a veteran with one or two late payments in the past 12 months, it is not a deal breaker.