Delaware is home to many veterans and active-duty military personnel.
The Veterans Administration created the VA home loan to best serve its members. The loan guidelines are somewhat more relaxed than those for other loan products.
The biggest benefit is no required down payment\. Along with that, there is no required monthly mortgage insurance. Typically, the FHA charges $141 per month on a $200,000 loan amount, and the USDA charges $58. Interest rates on government loans are usually lower than rates on conventional loans. There is an upfront funding fee added to the loan amount, but for any veterans with at least 10 percent military disability income, this upfront fee is waived. Otherwise the fee is 2.15 percent for first-time loans and 3.33 percent on subsequent uses of eligibility.
Most of the closing costs, transfer taxes and upfront escrows can be paid by the seller. An earnest money deposit will need to be placed with the buyer’s purchase offer. This is normally $500 to $1,000. Home inspections and water tests are usually paid at time of service.
The VA also has a great streamlined refinance loan program called the Interest Rate Reduction Refinance Loan. The upfront funding fee is .5 percent of the loan amount but is waived for borrowers with at least 10 percent military disability income. This loan is available for VA-to-VA loans.
Other loans can be refinanced into VA loans but not with the streamlined guidelines.
Some veterans may not be aware they can take advantage of these awesome benefits. When weighing the loan options, the VA loan is almost always the best choice.
For more information, contact a recommended mortgage professional.