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VA Mortgages Building Popularity

Posted by:  Chip Poli
2011-11-07 18:59:15

The Veterans Administration Mortgage Guarantee Program has proven to be a very valuable resource for Veterans returning home.

The VA Mortgage Program is administered by the Department of Veteran Affairs and was originally conceived in 1944 as a way to defray some the emotional and economic issues that would face a service man or woman after returning home from World War II.

Over the years, the VA has insured 10’s of thousands of home loans for active duty service men and woman, retired veterans, reservists and surviving spouses of men and women killed in the line of duty.

In this article, we will discuss a few of the factors that make VA Mortgages so popular.

No Money Down: VA Home Loans most popular feature is 100% financing.  Customarily a first time home buyer would be required to put down at least 3.5% – 5% of the purchase price.

No Monthly Mortgage Insurance: Most first time home buyer programs require you to buy costly mortgage insurance. Mortgage Insurance provides protection to the lender against any loss caused due to defaulting borrowers.

VA Mortgages do require a funding fee which is automatically financed within your mortgage balance however there is no monthly payment due to the VA once the loan is closed. This can save service men and woman hundreds of dollars monthly.

Below is a chart used to determine your VA Funding Fee:

VA Mortgage Funding Fee Chart

Credit score eligibility: While credit is an important factor when qualifying for any home mortgage, VA Loans have very reasonable credit score requirements, even as low as 620 scores.

Lower interest rates: Another advantage of opting for VA home loans is that they come with considerably lower interest rate than conventional loans. You can get 30 year fixed rates as low as you would see with FHA loans, while still avoiding mortgage insurance.

Concessions for Closing Costs: The VA allows for what is commonly referred to as “Seller Paid Closing Costs”. Essentially what this means is you can add the closing costs to the purchase price and the seller will actually credit you the exact amount of those costs at closing. Thus, you would have no out of pocket expenses for closing costs at settlement.

Here is an example:

Let’s assume that you are buying a home in Alston, MA. The purchase price is $340,000 and the lender has indicated that your potential closing costs are $3,000, the new purchase price would be $343,000 and the seller would give you a credit at closing for the $3,000 to cover all the associated fees and the seller would net $340,000.

VA fee waived for disabled veterans: The VA allows for special provisions for disabled veterans. The VA will waive the funding fee for any disabled veterans that meat certain criteria.

How do I determine if I am eligible for a VA mortgage?

The first step in determining your eligibility for a VA Home Loan is to secure two documents:

1. DD 214 Certificate of Release or Discharge

2. COE or Certificate of Eligibility

There are numerous other things to consider, the best way to start the process is to contact on of our mortgage professionals.

Poli Mortgage Group Currently offers VA Mortgages in the following states:

Massachusetts, New Hampshire, Connecticut, Rhode Island, Vermont, Maine, Maryland, Florida, Georgia, Alabama, Tennessee, North Carolina, Virginia and Kentucky.

Poli Mortgage Group - Rates. Integrity. Service.


866-353-POLI or www.PoliMortgage.com

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