The Pros And Cons Of VA Loans

The Pros and Cons The Pros and Cons of of VA Loans VA Loans

The Veteran’s The Veteran’s Administration guaranteed Administration guaranteed home loan program has home loan program has allowed millions of allowed millions of veterans and active duty veterans and active duty service members an service members an affordable way to own their affordable way to own their own homes. own homes.

The program does not The program does not provide home loans for provide home loans for veterans. Instead, it veterans. Instead, it guarantees loans given by guarantees loans given by private lenders. private lenders.

A look at the pros and cons A look at the pros and cons of the program can help of the program can help homebuyers determine if a homebuyers determine if a VA guaranteed loan is right VA guaranteed loan is right for them. for them.

Pros of VA Home Loans Pros of VA Home Loans

The VA home loan program The VA home loan program is popular because it offers is popular because it offers homebuyers a number homebuyers a number of advantages: of advantages:

· · payment is required payment is required – – Homebuyers can purchase Homebuyers can purchase a home sooner because a home sooner because they do not have to save for they do not have to save for the large down payment the large down payment required by lenders offering required by lenders offering conventional loans. conventional loans. Little or no down Little or no down

· · rates rates - - Because the risk for Because the risk for repayment of the loan is repayment of the loan is covered by the federal covered by the federal government, lenders can government, lenders can offer lower interest rates. offer lower interest rates. Competitive interest Competitive interest

· · the home is assured the home is assured – – A VA appraisal ensures that the appraisal ensures that the home is worth the value of home is worth the value of the loan. the loan. The purchase price of The purchase price of A VA

· · limited limited – – The VA program The VA program will pay customary closing will pay customary closing cost items, but not cost items, but not additional costs. additional costs. Closing costs are Closing costs are

· · penalty penalty – – Homeowners who Homeowners who then sell their property do then sell their property do not have to pay a penalty not have to pay a penalty for paying off the loan for paying off the loan earlier than its term. earlier than its term. No prepayment No prepayment

· · assumable assumable – – The homeowners can offer the homeowners can offer the favorable mortgage terms favorable mortgage terms to a subsequent buyer. to a subsequent buyer. VA loans are VA loans are The

· · financial difficulties financial difficulties – – If the homeowner has a financial homeowner has a financial setback and cannot make setback and cannot make payments, special terms payments, special terms can be negotiated for them. can be negotiated for them. Forbearance for Forbearance for If the

· · approved construction approved construction – – The VA will assist in The VA will assist in enforcing the builder’s enforcing the builder’s warranty for justifiable warranty for justifiable construction complaints. construction complaints. Warranty for VA Warranty for VA

Cons of VA Cons of VA Home Loans Home Loans

A home loan through the A home loan through the VA program also has a VA program also has a number of disadvantages number of disadvantages that homebuyers should that homebuyers should take into account: take into account:

· · the purchase of primary the purchase of primary residences residences - - These loans cannot be used for cannot be used for purchasing investment purchasing investment property or second homes. property or second homes. VA home loans are for VA home loans are for These loans

· · loan funding fee loan funding fee – – The VA imposes a fee on these imposes a fee on these loans to fund the program. loans to fund the program. The fee can be rolled into The fee can be rolled into the loan amount. the loan amount. You must pay a VA You must pay a VA The VA

Veterans who have Veterans who have service service- -related disabilities related disabilities are exempt from paying are exempt from paying this fee. The funding fee this fee. The funding fee increases each time you increases each time you use the VA home loan use the VA home loan funding program. funding program.

· · to a sale with VA loan to a sale with VA loan – – A number of misconceptions number of misconceptions regarding VA home loans regarding VA home loans have contributed to seller have contributed to seller reluctance to enter the reluctance to enter the application process. application process. Sellers may not agree Sellers may not agree A

However, sellers may be However, sellers may be required to pay some of required to pay some of the closing costs, and this the closing costs, and this expense may put off expense may put off some sellers. some sellers.

· · overlays may apply overlays may apply – – The VA home loan program VA home loan program does not impose limits on does not impose limits on home loans. However, home loans. However, private lenders may have private lenders may have additional requirements, additional requirements, called overlays, in regard called overlays, in regard to loan amounts. to loan amounts. Loan limits and Loan limits and The

These requirements help These requirements help to ensure that the lender to ensure that the lender maintains its favorable maintains its favorable record with the VA. record with the VA.

· · guarantee construction guarantee construction defects defects – – Approval of the Approval of the loan neither guarantees that loan neither guarantees that the property is free of the property is free of defects, nor can it compel defects, nor can it compel the builder to correct any the builder to correct any problems with construction. problems with construction. VA loans do not VA loans do not

However, it can suspend the However, it can suspend the builder from the VA program. builder from the VA program.

· · not provide for legal not provide for legal services, if necessary services, if necessary – – Any legal action against Any legal action against the builder or previous the builder or previous owner is the responsibility owner is the responsibility of the buyer. of the buyer. The VA program does The VA program does

Our VA Loan Specialist Our VA Loan Specialist helps veterans obtain the helps veterans obtain the loans they are entitled to. loans they are entitled to.

He served in the United He served in the United States Marine Corps, and States Marine Corps, and now devotes himself to the now devotes himself to the Veteran home buyer in the Veteran home buyer in the Phoenix area, fulfilling a Phoenix area, fulfilling a passion of his while at the passion of his while at the same time helping others same time helping others achieve home ownership. achieve home ownership.

Be a proud homeowner today. Be a proud homeowner today. For more details call 480 For more details call 480- - 351 351- -5904 5904

V Visit the site at: isit the site at: www.valoansforvets.com www.valoansforvets.com

VA Loans for Vets VA Loans for Vets 7702 E. Doubletree Ranch Road, 7702 E. Doubletree Ranch Road, Suite 220 Suite 220 Scottsdale, AZ 85258 Scottsdale, AZ 85258 Phone: (480) 351 Phone: (480) 351- -5904 Email: jimmyv@fcbmtg.com Email: jimmyv@fcbmtg.com 5904

The Pros And Cons Of VA Loans