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 VA Mortgage Loans
What is a VA Mortgage?
VA Mortgage Loan programs are available for qualified veterans to purchase a home with no money down, provided that sales price does not exceed the current appraised value of the home. And with VA Loans, closing costs can be paid by the seller up to 4% of the sales price of the home.
What are the advantages of VA Mortgage versus Conventional Loans?
VA mortgage loans offer many benefits and protections that you won't find in other loans including:
 VA Mortgages Have Great Interest Rates
A distinct advantage of a VA mortgage, as compared to a conforming loan, is great interest rates, no down dayment and no mortgage insurance (MI). Depending on the program, the daily VA mortgage rates are usually better than a conforming 30-Year Fixed loan.
VA Mortgages Have No Down Payment
VA Mortgages require no down payment requirement. Other loan programs don't allow this.
VA Mortgages Have No Mortgage Insurance
There is no monthly mortgage insurance. The VA does charge an up front VA funding fee, which may be financed. The exception to this is that if a veteran is in receipt of VA service connect disability payments each month, he or she does not have to pay a VA funding fee.
VA Mortgage Closing Costs Are Limited By The VA
The cost that a Veteran can be asked to pay for a mortgage is limited to certain essential charges by the VA.
What factors determine if I am eligible for a VA Loan?
VA uses two methods for income qualification purposes. The primary method of evaluating a veteran's income is the residual income method. Under this method, the underwriter determines that a veteran has sufficient income to cover day-to-day living expenses after paying housing expenses, taxes, and other debts such as car payments and credit card payments. VA also uses a debt-to-income ratio method like many programs. However, VA uses only one ratio (41%) which is the ratio of total debt (both housing and other debt) to income. Your credit background will be fairly considered. At least a 620 FICO credit score is very helpful to obtain an VA approval.
See more on VA Mortgage Requirements.
What is the maximum amount that I can borrow?
The maximum amount for a VA Home Loan is determined by:
Maximum Loan Amount: The maximum loan amount allowed for a VA Mortgage varies from county to county. The highest maximum VA Mortgage right now is $1,094,625. The lowest maximum VA Mortgage amount available in any county is $417,000. To see what the limit is in the county in which you're interested, visit the following page http://www.homeloans.va.gov/docs/2009_county_loan_limits.pdf. This site lists U.S. territories as well as states.
Maximum financing: The maximum VA Mortgage amount will be 100% of either the appraised value of the home or its selling price, whichever is lower.
How much money will I need for the down payment and VA mortgage closing costs?
VA Mortgages require no down payment up to $417,000, which is the conforming loan limit for 2008 is($625,500 for Hawaii, Alaska, Guam and U.S. Virgin Islands). This means that qualified veterans could get a no down payment purchase loan for those amounts.
What property types are allowed for VA Mortgages?
While VA Mortgage Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and 1-4 family residences, in which the borrower intends to occupy one part of the multi-unit residence.
Can I get a VA Mortgage after bankruptcy?
Criteria for VA loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for a VA mortgage. If you are in a Chapter 13 bankruptcy and have made all court approved payments on time and as agreed for at least one year, you are also eligible to make a VA loan application.
More information on VA Mortgages
Complete Online Application
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Use our VA Loan Helper to help find the right mortgage for your situation.
 Why choose a VA Mortgage?
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VA Mortgages require no down payment and low VA mortgage closing costs.
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There are no prepayment penalties for an VA Mortgage.
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VA Mortgages have no monthly mortgage insurance.
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A VA Home Loan is eligible for non-credit qualifying, Streamline Refinance or "IRRRL". -
A VA Mortgage is available all areas of the country, provided a market exists for the property and the home meets VA's property standards.
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A VA Home Loan may be used to purchase or refinance a new or existing home. -
VA Mortgages are offered at terms of 15 or 30 years.
What types of VA Mortgages are available?
Fixed Rate Mortgage
Most VA mortgages are fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same for the entire loan period. With a fixed rate VA Mortgage, you always know exactly how much your monthly payment will be.
Adjustable Rate Mortgage
With VA's adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. VA uses the 1-Year Constant Maturity Treasury Index (1 Yr CMT), the most widely used index, to calculate the changes in interest rates.
The maximum amount that the interest rate that an ARM VA Mortgage may increase or decrease in any one year is 1 percentage point. Over the life of the loan, the maximum interest rate change is 5 percentage points over the initial interest rate.
I have already obtained one VA loan. Can I get another one?
Yes, your eligibility is reusable depending on the circumstances. Normally, if you have paid off your prior VA loan and disposed of the property, you can have your used eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property.
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