VA Loan Program, Designed Specifically for Service Members
A person opens up a modest savings account and watches for years as it grows to a reasonable down payment amount. When the buyer finally hands the money over to a lender, we might see—for that moment—a little bit of sanity leave the buyer’s eyes.
It is never easy to buy a home and part with so much money. That is why many buyers opt for government-backed loans. They are popular for helping people save a handful of cash. More specifically, veterans looking to buy a home in Bedford, NY can remain sane using the VA home loan’s money-saving benefits.
Keeping Savings in the Savings Account
$0 Down
Money sitting and growing in the bank for months, maybe years, can continue to sit there or be used for other expenses. The VA loan’s zero down payment option removes the biggest obstacle for potential homeowners. The 20% down payment requirement of conventional loans that often deter people from buying a home.
Low Interest Rates
The Department of Veterans Affairs guarantees the VA home mortgage program. This allows lenders to offer low and affordable rates to homeowners with decent credit ratings, most lenders requiring at least a 620, and debt-to-income ratios that can be as high as 41%. Interest rates on conventional mortgage payments are usually higher unless a person has an excellent or a beyond average credit score.
Receive $417,000 in Most Counties
Veteran borrowers can receive up to $417,000 in most counties. This is the loan limit in Bedford, NY. However, New York lenders can approve jumbo loan amounts for higher cost areas.
No Hidden Fees or Private Mortgage Insurance (PMI)
PMI eats a significant chunk of money out of a homeowner’s wallet each month. It can cost traditional homebuyers up to $250 extra per month. The VA loan does not require PMI. This combined with the other benefits means a veteran borrower pays less per month on mortgage.
In addition to the no PMI rule, the VA forbids banks from charging veterans hidden fees on their loans. Hidden fees often rear their ugly head after the papers boast the purchaser’s signature. It catches many people off guard. VA borrowers do not need to worry about burdensome surprises.
Gifted and Borrowed Funds
Veterans purchasing a home with the VA loan will have to pay a funding fee. However, the fee is only 2.15% of the loan. It can either be rolled over into the monthly mortgage payment or paid up front with borrowed or gifted funds.
Veteran borrowers should not take this allowance for granted. Conventional lending does not let purchasers use borrowed or gifted funds from family members, friends, or others; however, the VA loan does not restrict people from accepting gifts. Homeowners use gifted funds to focus on furnishing, restoring or repairing a new home. They can also use these funds to pay closing, appraisal, and funding fee costs.
Applying
Veterans must be able to prove serving the military for the required time period of 90 days during wartime and 180 days during peacetime. Veterans must apply for a certificate of eligibility, which shows this.
Veterans can apply for a COE in three possible ways:
- ONLINE: eBenefits portal (http://www.ebenefits.va.gov)
- Apply through a lender or VA counselor. This could take only minutes. It quick and easy for a lender or VA counselor. Be sure to have evidence ready.
- Apply by mail. Fill out a VA Form 26-1880 and send it in. This takes the longest. Surviving spouses must submit a certificate of eligibility request by mail. They must send in the VA Form 26-1817.
Dishonorably discharged veterans do not qualify for a VA loan.
For more information contact the Department of Veterans Affairs or a VA loan specialist today!