VA Mortgage And Its Unique Characteristics
Shopping for a VA Mortgage and asking lenders for their current rate is a lot more complicated than buying a phone. VA loans are guaranteed by the Veterans Administration and insure the lender from loss. Take note that VA mortgage rates are not issued by the VA, but by lenders.
For those who qualify for a VA mortgage here are the three core advantages that provide money saving opportunities.
1. Big Financial Savings
VA loans are special because of their no down payment, no PMI and low interest rate offers. The no down payment option can ease the burden of saving for home when most conventional loans require you to put down 10 to 20% down payment. VA loans are truly no money down loans. You have the option to put down money to lower your monthly payment, but you are not required to do so. Low interest rate that are between 0.5 to 1 percent lower than other conventional loans. There is also no need for private mortgage insurance, saving you up to $100 monthly.
2. Flexible Loan Type
VA loans offer two types of loan. It can either be Adjustable Rate Mortgage (ARM) or the Fixed Rate Mortgage type. Adjustable rate mortgage are designed for the low to moderate income families while in fixed rate loan interest rates stay the same for the term of the loan could be 15 or 30 years.
3. Easy Credit Approval
With VA loans there is no set credit score requirement. The approval focuses on the debt to income ratio rather than your past credit history.
VA Mortgage is only applicable to owner occupied type of residences. You cannot use your VA loan for vacation type properties. Shop around to see if the grass is greener with other lenders. Always compare costs and get the best deal is always wise. Knowledge is your best weapon when deciding what VA mortgage is suitable for your situation.