Part of shopping for a new home means finding the financing to pay for it — after all, it is probably the single largest and most important purchase that people make. Shopping for a mortgage is made more stressful by the number of lenders, options, rates, and market trends. Here’s a short guide to VA loans to help make the process a little bit easier.
1. What are VA loans?
VA loans resulted from a government effort that began in 1944 to help returning service members purchase loans. These loans are issued by participating lenders like as Veterans United Home Loans and are backed financially by the federal government. This federal backing makes lending to service members easier for lenders to do.
2. What are the mortgage rates like?
Since VA loans are backed by the federal government, lenders and borrowers have greater flexibility and safety. This means that there is generally no requirement of a large down payment for the home; in fact, VA loans are among the only type of loan left on the market that allows a 0% down payment. Additionally, the mortgage interest rates are rather low. This results in better mortgage loan rates for VA loans when compared with other types of loans (fixed rate, adjustable rate, FHA loans). VA loans are also much easier to get, since a mortgage company has the assurance of a guaranty from the federal government.
3. What can I use a VA loan for?
VA loans can actually be used for more than just buying a home. They can be used to make improvements to a home, like making it more energy efficient, or to buy a manufactured home and lot. There are some guidelines and requirements for these types of purchases.
Do you have any questions about VA loans or mortgage rates? Feel free to ask us in the comments section below.
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