Mortgage Alternatives for Veterans
Veterans of America’s armed forces and their partners have many advantages the general public can’t obtain. Veterans don’t need to be combat veterans to be eligible, but the sort of service can have an influence on the benefits. Veterans who served full time on active duty have various advantages than those who served in the National Guard or reserves.
Veterans Affairs, or VA, Loans
The U.S. Department of Veterans Affairs provides loan guarantees for veterans. VA loans require that the veteran pay a financing fee when the loan is closed. This financing fee varies based upon service type and whether the benefit has been used before. VA enables financing of the entire purchase price of the home along with the financing fee and energy efficiency improvements to the home. VA loans are available in 15-, 20- and – 30-year terms. A certification of eligibility from the VA and the experts DD-214 release paperwork is required.
Interest Rate Reduction Refinance Loans (IRRRLs)
VA also offers IRRRLs to veterans who currently have a VA loan. This system enables the veteran to refinance a VA loan without an appraisal, credit report, or any income or employment verification. The new loan can’t exceed the original balance of the loan and the current loan should have been paid on time for the most recent 12 weeks to qualify for this program.
Federal Housing Authority, or FHA, loans
FHA requires a down payment of at least 3.5 per cent, unlike VA’s no-down payment . FHA provides other loan applications that VA does not. FHA allows for variable rate loans, rehabilitation loans and other specialty applications. FHA requires upfront mortgage insurance premiums and monthly mortgage insurance premiums regardless of the loan-to-value. FHA loans are available with fixed-rates, adjustable-rate and balloon mortgage notes.
Veterans are eligible to get any funding non-veterans qualify for including conventional loans. Conventional mortgage loans are underwritten to Fannie Mae’s and Freddie Mac’s guidelines. In addition to conventional loans, many lenders provide portfolio loans underwritten for their own guidelines. These loans do not require any type of mortgage insurance, or financing fee if there is at least 20 percent equity in the home. As of July 2010, the loan limit is $417,000. Any conventional loan above $417,000 is considered a student loan and may be subject to further lending restrictions. Conventional loans are available in fixed-rate, adjustable-rate and many other specialty applications.