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The US Department of Veterans Affairs provides patient care and federal benefits to veterans and their dependents. They have specific loans for Veterans, Reservists, and active-duty service members (those who have served our country on active duty since World War II). VA offers some of the easiest requirements of any mortgages.
Some of the benefits of VA financing:
The more you know about this home loan program, the more you will realize how little “red tape” there really is in getting a VA loan. These loans are often made without any down payment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans.
What is a VA guaranteed loan and what can it be used for?
These loans are made by a lender, such as a mortgage company, savings and loan or bank with the guaranty of the VA. The loan can be used for a variety
of home-ownership needs, such as to buy a house, townhouse or condominium unit in a VA-approved project, to build a home or to simultaneously purchase and improve a home.
Who is eligible for a VA home loan?
Veterans who served on active duty and were discharged under conditions other than dishonorable, during World War II and later periods are eligible for VA loan benefits. Members of the Selected Reserve, including National Guard, who are not otherwise eligible and who have completed 6 years of service and have been honorably discharged or have completed 6 years of service and are still serving may be eligible.
Why is VA financing a good deal?
Veterans should consider the many advantages of VA home loans. The most important feature of the program is that veterans and active duty military personnel can finance their homes with no down payment. That means the loan maximum may be up to 100 percent of the VA-established reasonable value of the property.
What if I’ve already had a VA loan?
Veterans who had a VA loan before may still have “remaining entitlement” to use for another VA loan. The current amount of entitlement available to each eligible veteran is $36,000. This was much lower in years past and has been increased over time by changes in the law. For example, a veteran who obtained a $25,000 loan in 1974 would have used $12,500 guaranty entitlement, the maximum then available.
Are there any costs involved?
One of the common errors made by people buying homes is to think that the only cost will be monthly payments of principal and interest on the mortgage. It is important to keep in mind that there are other items which have to be paid which add up to a substantial outlay. Before you buy, be sure that your income is sufficient to cover all of the cost which you will have to pay.
How do I apply for the loan?
The application process for VA financing is no different from any other type of loan. In fact, the VA application form is the same as that used for HUD/FHA and conventional loans. The mortgage lender verifies the applicant’s income and assets, and obtains a credit report to see that other obligations are being paid on time. If all is well and the appraised value of the property is enough to cover the loan needed, the lender, in most instances, can then close the loan under VA’s automatic procedure.
The Cost of Homeownership
One of the common errors made by people buying homes is to think that the only cost will be monthly payments of principal and interest on the mortgage. It is important to keep in mind that there are other items which have to be paid which add up to a substantial outlay. Before you buy, be sure that your income is sufficient to cover all of the cost which you will have to pay.
Equal Housing Opportunity
Discrimination in the sale of housing because of race, color, religion, sex or national origin is prohibited by Federal laws. In November 1962, Executive Order 11063 banned discrimination in all federally assisted housing.
Future Costs of Homeownership
The down payment, if any, and closing costs are costs you will have when your loan is made. But they are only the initial costs. You must also be able to pay the future costs from your income.
The Agreement to Purchase the Home
When you have decided to buy, the builder or seller will usually require a cash deposit (earnest money) as evidence that you really intend to go through with the deal. Make sure that when you make a deposit, you get a signed agreement from the seller to refund your deposit if you are unable to obtain VA financing, or if the builder and/or seller fails to go through with his or her part of the agreement.
The Final Process- Close of Escrow
After the house is ready and the financing has been arranged, the lender will set a date for “settlement” or “closing.” Settlement day is the day when the property officially becomes yours. You will also remember it as the “paper signing day.” It generally occurs 30 days or more after the contract has been signed.
Before and After Moving Day
Soon after final settlement or closing, you will move into your new home. Before you close on your new home, your Realtor® will take you on a Final Walk-Through. This is when you should check the house carefully to be sure that it is in good condition, and that the builder or seller has completed everything called for in the contract.
Some Other Items to Know About
If you buy a house with a VA loan, VA will appraise the property to establish its reasonable value, which is an estimate of the current market value. You will be notified of the reasonable value. If you are building a home or buying a newly completed home with VA financing, VA or HUD/FHA will usually inspect the property during construction. These inspections are to see that the house is constructed according to the plans and specifications originally filed with VA and that it meets the minimum property requirements established by the Government.
This inspection service is valuable to you because it helps assure that your builder follows the construction practices advocated by the Government to assure a sound structure. It does not give you architectural supervision and does not assure you that you will be completely satisfied with what you get. Your main reliance must be on the reputation and integrity of the builder from whom you choose to buy. But remember that the Government cannot guarantee you that the house is properly constructed in all respects, nor can it guarantee that you will be satisfied with the house in every way.
The responsibility of the Government is limited under the law. VA is guaranteeing your loan, but it cannot under the law guarantee your house. Because of this, it is very important that you have confidence in the ability and honesty of the company or person who is building or has built the house. If you have any doubts at all, be sure to get the advice of people you can trust who know the home building business. A few words of good advice from a responsible person can save you years of future trouble.
In addition to the general location and neighborhood, you should make sure you are going to be satisfied with the size and shape of your lot, and with the existing or proposed lawn, shrubbery, walks, driveway, garage. etc. If you want to have play space for the children, or a garden, make sure that sufficient space is available.
The saying in real estate is “Location, Location, Location”. Due your due diligence prior to making an offer to buy a home. If you want to be entirely satisfied with your new home, you’ll want to do your homework before you fall in love with a house. There are many things to consider, including location, schools, surroundings and zoning.
United States Department of Veterans Affairs Website: www.va.gov
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I can also provide further education regarding Real Estate Investing. Please do not hesitate to ask me how I can further your education and resources to secure your real estate investments and your long term financial freedom.
Cindy Hallas
Mortgage Loan Officer | NMLS 334571
CMG Financial | NMLS 1820 | AZBK 0122866
7047 E Greenway Pkwy Suite #180, Scottsdale, AZ, 85254
Mobile: 602.793.9061 | Fax: 602.638.1844 | FT 602-531-0088
challas@cmghomeloans.com| www.cindyhallas.com
NMLS #334571 |AZ License # 0916143 | CA License CA-DOC334571 | FL License L0116410 | IL license 031.0080631| NV License 55918 | TN License 334571 | Licensed in TX | WA License MLO-334571
NMLS #334571 |AZ License # 0916143 | CA License CA-DOC334571 | FL License L0116410 | IL license 031.0080631| NV License 55918 | TN License 334571 | Licensed in TX | WA License MLO-334571
CMG Financial™ is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal housing lender. Licensed by the Department of Financial Protection and Innovation (DFPI) under the California Residential Mortgage Lending Act No. 4150025.; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Mortgage Servicer License No. MS068. Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; Registered Mortgage Banker with the Texas Department of Savings and Mortgage Lending, and Licensed by the Virginia State Corporation Commission #MC-5521. Licensed by the Washington Department of Financial Institutions under the Consumer Loan Act No. CL-1820. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. NMLS Consumer Access (www.nmlsconsumeraccess.org).
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