A VA Loan is a loan option offered through the Veterans Administration. This financing option is available if the borrower is an eligible service member. Veterans must provide a veteran's certificate of eligibility and the appraiser is assigned by the VA.
Features
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Financing for eligible service member (veterans, reservists, active duty personnel, or eligible family members).
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Low to no down payment options available.
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No mortgage insurance requirement.
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Flexible income, debt, and credit requirements.
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Down payment and closing costs may come from a gift or grant.
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Available in a variety of fixed-rate and adjustable rate loan options
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Potential for minimal out-of-pocket expenses with seller contributions.
Considerations
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The borrower typically has to pay a one-time VA funding fee that can be financed into the amount of the loan.
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Financing is available only for primary residences.
Mortgage Insurance
A contract that insures the lender against loss caused by a mortgagor’s default on a government mortgage or conventional mortgage. Mortgage insurance can be issued by a private company or by a government agency.
Fixed-Rate Mortgage (FRM)
A mortgage interest that are fixed throughout the entire term of the loan.
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes during the life of the loan according to movements in an index rate. Sometimes called AMLs (adjustable mortgage loans) or VRMs (variable-rate mortgages).
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