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VA Loan Information
WHAT IS A VA-GUARANTEED LOAN?
These loans are made by a lender, such as a mortgage company, savings
and loan or bank. VA's guaranty on the loan protects the lender against
loss if the payments are not made, and is intended to encourage lenders
to offer veterans loans with more favorable terms. The amount of guaranty
on the loan depends on the loan amount and whether the veteran used some
entitlement previously. With the current maximum guaranty, a veteran who
hasn't previously used the benefit may be able to obtain a VA loan up to
$417,000 depending on the borrower's income level and the appraised value
of the property. The local VA office can provide more details on guaranty
and entitlement amounts.
WHAT CAN A VA LOAN BE USED FOR?
- To buy a home, including townhouse or condominium unit in a VA-approved project.
- To build a home.
- To simultaneously purchase and improve a home.
- To improve a home by installing energy-related features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA. These features may be added with the purchase of an existing dwelling or by refinancing a home owned and occupied by the veteran. A loan can be increased up to $3,000 based on documented costs or up to $6,000 if the increase in the mortgage payment is offset by the expected reduction in utility costs. A refinancing loan may not exceed 90 percentof the appraised value plus the costs of the improvements. Check with a lender or VA for details.
- To refinance an existing home loan up to 90 percent of the VA-established reasonable value or to refinance an existing VA loan to reduce the interest rate.
- To buy a manufactured home and/or lot.
FREQUENTLY ASKED QUESTION # 10 [ -more VA Loan questions- ]
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Q: Adjustable Rates - Do I have to take a fixed-rate VA loan?
A: Veterans who shop around will learn it's possible to get a fixed rate loan, negotiated with the lender of your choice. Another option? The adjustable rate loan, where interest may be adjusted one percent annually, up to five percent over the duration of the loan period. Which to choose? No matter which way you think is best, do your homework, shop around and get the best rate possible. Some make the mistake of taking the first offer that sounds fair, but don't be intimidated by the process. You may be eager to get the "hard part" over with and get into a home. Take some time to research the biggest purchase of your life! When in doubt, consult an expert, a legal advisor or a trusted friend in the real estate business. The more research you do, the better you'll feel at closing time. The VA is in the business of loan guaranty, but the choice of which loan to take is strictly up to you. It's also a good idea to look for businesses who make a habit of cultivating customers who are veterans--you may find their expertise in VA matters quite valuable to reduce unnecessary waiting times on paperwork.
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Remember, the VA does not make home loans. They insure the loans that we can assist you in getting.
Let us help you get a VA insured mortgage loan at the lowest possible rates.
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