Who can tell me about home loans. Esp VA?

I only looked into using my VA Home Loan benefits once. From what I was told, there is very little difference between the VA loans and conventional loans. In fact, most conventional loans were more attractive than the VA loan. This was about three years ago, so I don't remember the specifics, but from what I do remember, the VA loans were set up when home loans were harder to get, and military members were given a slightly easier time getting a home loan through the VA. Nowadays, most home loans are pretty damn easy to get, nullifying the VA advantage.

Double check on that, though. Call the national VA hotline and see if they can tell you the difference. Most mortgage brokers have all the info available, though.,

Oh, I just remembered - and I'm sure you know this, but the VA loan is not a loan, it's a guarantee. Almost as if the VA is co-signing on your home.

 

FYI. The Serviceman's Readjustment Act of 1944 created the VA program providing many benefits to returning veterans GOD BLESS THEM ALL! One of these benefits is a partially guaranteed loan for a personal residence for the veteran. On rare occasion, the VA will make a loan directly if there is no lender available to the vet. But normally they are providing only a guarantee to another lender.

There is an entitlement for veterans and widows (only if the veteran died as a result of service in the military) in the form of a partial guarantee (up to $60,000) on a home loan made by a lender.

There is a service requirement in the armed forces before entitlement.

1. The pre-1981 rule was 90 days during war or 181 days during peace.

2. The post-1980 rule is 2 years of service with a medical discharge waiver for service related disabilities.

3. Desert Shield/Storm - 90 days.

4. Reservists with 6 years of service.

The government guarantees only a portion of the loan. The maximum guarantee is $60,000. The actual amount of the VA guarantee will vary with the amount borrowed.

VA Loan Characteristics:

1. 1-4 family dwellings.

2. Must be owner-occupied by the veteran.

3. The VA now allows the interest rate to float to current market conditions.

4. The buyer can now pay points.

5. The appraisal is called a Certificate of Reasonable Value (CRV).

6. There is no loan limit set by the VA.

7. There is no down payment required.

8. Qualifying uses a budget method with required family support to account for family size as well as a 41% ratio for monthly expenses.

9. There is no insurance, it is a guarantee (up to $60,000).

10. The buyer must pay a 2% VA funding fee (lower rate available with greater down payment, higher if the entitlement has been used before).

11. These loans are assumable by anyone, even nonvets, but the buyer must always qualify to assume the loan effective with loans made after 3-1-88.

12. Budget loans (so named because they budget for taxes and insurance on the property) only with PITI payments.

13. Prepayment is allowed without penalty.

14. The entitlement may be restored to $60,000 under two circumstances.

15. Pay off the loan and sell the property.

16. Sell the property to a vet who uses his/her entitlement (freeing up the seller's) and obtain a release of liability from the VA.

17. Any unused partial entitlement may be used for a second VA loan even with the first one still outstanding.

Hope this helps.