Veteran Administration loans are available for veterans. These loans are offered by the Veterans Administration and are provided to veterans to help them for buying their homes. This program is a perfect home financing program for veterans who are otherwise cannot afford to buy their homes on their own.
Eligibility for VA Loans
The eligibility criterion for VA loans is specific. To qualify for this loan applicants must hold a Certificate of Eligibility that can be obtained from Veteran Administration.
How VA Loans are funded?
VA loans are not mortgages or Veterans Administration doesn’t provide typical mortgages to borrowers. VA runs financing programs that are funded by the lenders that work with the Veterans Administration as approved partners. The Veterans Administration will pay off a percentage in the event when the veterans fail to pay it. At the existing percentage, the Veterans Administration will pay up to $36,000 for a VA loan of $144,000 and up to 460,000 for $144,000.
Pros and Cons of VA Loans
VA loans are both advantages and pitfalls. However, it is decided on the financial situation of veterans whether VA loans will be beneficial for them or not.
Benefits of Veteran Administration Loan
Many veterans find VA loan program beneficial for them. VA loans offer a number of benefits like there are no down payment and penalties on prepayment. The interest rates on VA loans are also very lower as compared to other traditional mortgages.
Pitfalls of VA loan programs
These types of loans have some pitfalls. These disadvantages include the long and tiring process of loan approval. Most of the time, lenders don’t give much attention to VA loans and they are not willing to process these loans in quick time. It is also important to note that not all lenders work with VA as approved partners. So that is the reason why applicants have limited choices of lenders for VA loans as compared to other loans. Another pitfall of VA loan is that home sales price is probably less or sometimes not negotiable because seller will be required to cover the complete closing costs. In addition to this, if the veteran fails to pay off VA loan, the Veteran Administration will repay the loan to the lender, but in most cases VA will try to recover the money from the veteran.
Carry Out Proper Research Before Borrowing from VA
For many veterans Veteran Administration loans the ideal home financing programs. However, many veterans become disabled or unable to continue working. Due to their inability to work or any other reason makes it difficult for them to buy new home. In such a case, they can take help from a VA loan. It is always recommended to veterans to get proper information about these mortgages prior to getting these loan programs to know whether VA loans will be beneficial for them or not.
