12 Killer Truths About VA Home Loan. What You May Not Know About VA Mortgages
08/09/2010 The VA home loan is a unique, specialized loan that is available to American veterans. These loans offer excellent terms. The following list outlines some key facts about VA home loans.
1. VA loans are not administered through the Veteran's Administration. Rather, they are administered by private-sector mortgage companies. The Veteran's Administration insures the VA loans.
2. You'll need a Certificate of Eligibility (COE) to prove that you are a veteran and that you are eligible. Without a COE, you won't be able to apply for a VA home loan. Once you've gotten your COE, it will remain valid for at least 12 months.
3. A VA loan can provide 100% financing for a home purchase or refinance. If you qualify for a VA loan, you won't have to put any money down.
4. Private mortgage insurance is not typically required with a VA loan, even though no down payment is made.
5. The Veteran's Administration requires a funding fee equal to 2.15% of the total loan amount. If, however, you choose to pay at least 5% as a down payment, the funding fee is waived.
6. You can use a VA home loan to purchase any new or preexisting home. You cannot use a VA home loan to purchase vacant land or to purchase a business.
7. A poor credit score won't significantly harm your chances of getting a VA home loan. It's more than likely that you'll be able to get very good terms despite a poor credit score. 12 months of good, clear credit history is all that's required.
8. Bankruptcy does not destroy your eligibility to take out a VA home loan. You'll have to wait at least two years after a Chapter 7 bankruptcy and at least one year after a Chapter 13 bankruptcy and prove at least 12 months of good credit history, but your eligibility still stands.
9. VA loans are not interest-only. All are amortized principle-interest loans.
10. Your Certificate of Eligibility (COE) will specify the amount of funding you are entitled to. You can take out multiple VA loans until you've reached this level of entitlement.
11. As a veteran, your overall eligibility to qualify for a VA home loan will not ever expire or run out.
12. Current mortgage rates on VA home loans vary. Rates will change from state to state and from day to day. Compare mortgage rates between multiple lenders in order to find the best mortgage rates.
