VA LOANS


The Veterans Administration works with lenders across the country to provide VA-Backed Loans. These VA-Backed loans provide a guarantee that offers limited covereage for the lender in the event of default on the part of the veteran.  This guarantee allows lenders to provide financing that they otherwise would not, if there was no guarantee – financing such as:

   Purchasing a home with little or no money down.
   Refinancing a home up to 100% of the value.
   Cash-out refinancing up to 100% of the home value.
   Refinancing VA loans with no appraisal or income verification.
   No Private Mortgage Insurance.
   Prime financing with average and below average credit.
   Bankrupcty or foreclosures within a shorter period of time.
   Higher debt-to-income ratio allowances.
   Assumable loans.
   And in many cases, lower priced interest rates.

There is detailed information available at the U.S Department of Veterans Affairs website: https://www.va.gov/housing-assistance/home-loans/.  We recommend that you visit the VA site when you can. We’ve included notes and links below to make navigating the VA site a little easier:

The VA Funding Fee: The funding fee is paid to the Veterans Administration, not the lender.  This fee plays a big part in making the VA-backed loan program sustainable so that other veterans can enjoy the program’s benefits for years to come; it’s essentially veterans helping veterans.  The fee is added into the loan – no need to pay for it out of pocket.  The funding fee is calculated based on a percentage of the loan amount.  These percentages can be viewed on the VA website in the link provided below this paragraph. 

Example: The percentage would be 2.3% for the first-time use of your VA loan.  The funding fee would be a little over $10,000 if you are making a $450,000 home purchase and putting no money down.  That $10,000 would be added to your loan.  There would be no Private Mortgage Insurance and a lower rate than a conventional loan. 

The minimum down payment you might find on a conventional loan is 3%, if almost everything is “perfect” with your loan.  A 3% down payment on a $450,000 home is $13,500 – money that must be paid out of pocket.  The conventional loan would also have Private Mortgage Insurance (PMI).  The PMI and interest rate would make your conventional loan payment higher than the VA loan.  The VA loan is the clear better choice in the home purchase example above.  However, there are some scenarios where a conventional loan works about better than a VA loan.
https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/#about-the-va-funding-fee

Are you eligible for a VA loan? https://www.va.gov/housing-assistance/home-loans/eligibility/

Interest Rate Reduction Refinance loan (IRRRL): The IRRRL is usually referred to as the “VA Streamline” because it allows eligible parties to refinance into a lower interest rate without an appraisal or evaluation of your income. There is no need for a credit check in some cases. You can get your IRRRL through an approved Broker, Bank, Mortgage company or Credit Union. 
https://www.va.gov/housing-assistance/home-loans/loan-types/interest-rate-reduction-loan/