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Honoring Those Who Served: Exploring the VA Loan Program

0.00% Down Payment

No Monthly Mortgage Insurance

Closing Costs can be financed

Owner Occupied property

Borrowers must be Veterans

A VA loan is a mortgage loan program designed specifically for veterans, active-duty service members, and certain eligible members of the National Guard and Reserves, as well as some surviving spouses of deceased veterans. It is a government-backed loan program that provides eligible borrowers with several benefits and advantages for purchasing or refinancing a home. Here are key features and benefits of VA loans:

No Down Payment Required: One of the most significant benefits of VA loans is that eligible borrowers can obtain a home loan without making a down payment. This feature makes homeownership more accessible to veterans and active-duty service members who may not have substantial savings for a down payment.

Competitive Interest Rates: VA loans often offer competitive interest rates that are comparable to or lower than those of conventional loans. The Department of Veterans Affairs (VA) guarantees a portion of the loan, which reduces the risk for lenders, allowing them to offer favorable terms.

No Private Mortgage Insurance (PMI): Unlike conventional loans with low down payments, VA loans do not require private mortgage insurance (PMI). PMI is typically required when a borrower's down payment is less than 20% of the home's purchase price, and it adds to the cost of the loan.

Lenient Credit Requirements: VA loans tend to have more lenient credit score requirements compared to some conventional loans. While there is no specific minimum credit score set by the VA, individual lenders may establish their credit score criteria.

No Prepayment Penalties: VA loans do not have prepayment penalties, allowing borrowers to pay off their loans early without incurring additional fees.

Streamlined Refinancing: VA offers two primary refinance options for VA loan borrowers: the Interest Rate Reduction Refinance Loan (IRRRL) and the Cash-Out Refinance. The IRRRL is a simplified process for lowering the interest rate on an existing VA loan, while the Cash-Out Refinance allows borrowers to tap into their home's equity.

Flexible Property Eligibility: VA loans can be used to purchase a wide range of properties, including single-family homes, condominiums, multi-unit properties (up to four units), and manufactured homes that meet certain VA standards.

VA Funding Fee: While VA loans have many advantages, they come with a one-time funding fee that helps offset the cost of the loan guarantee program. The funding fee amount varies depending on factors such as the borrower's military service, down payment (if any), and whether it's the borrower's first VA loan or subsequent use.

It's important for eligible veterans and active-duty service members to obtain a Certificate of Eligibility (COE) from the VA to prove their eligibility for a VA loan. COEs can be obtained through the VA or from lenders participating in the program.

For more information or to go over your own scenario, please contact mc at 408-393-2068

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