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VA Loans Or FHA Loans - What is the Best Home Loan Option For Veterans?

By: Amy Brown Click author's name for more of his/her articles

Of course, this has spawned a great deal of enthusiasm among lending institutions, as such loans are safe from defaulting, since these are backed by the federal government itself. One of the few full financing loan programs offered to particular members of the military group to purchase their own home properties is the VA home loan. Let's dig into some important distinctions and then consider what's possible and what's not. Among lender's who do offer Streamlines, requirements may vary. Depending on what services you have asked for, this could include analyzing your credit situation, real estate equity, debt situation and cash flow.
A veteran who doesn't have a certificate can easily obtain one by completing VA Form 26-1880, Request for a Certificate of Eligibility for VA Home Loan. Eligible veterans for the loan are those who served in active duty and have a honourable discharge following a minimum of 90 days of service during wartime. To get a qualifying loan, the person must have an Automated Certificate of Eligibility. Also, purchase price dictates what portion, if not all, of a veteran's entitlement must be used. This borrower has maxed out his entitlement; therefore, he is not eligible for a subsequent VA loan.
This borrower's full entitlement has been restored, and the proposed loan amount of $395,000 should get full 25% VA Guaranty with entitlement to spare, and no down payment is required. The VA streamline refinance home loan is a mortgage program backed by the government itself.
A 100% no money down program insured from the government to qualified veterans to stimulate the economy through low cost housing with interest rates lower then your normal conventional loan.
The average state maximum guarantee is 25% or $104,250 and the maximum home loan amount is $417,000. Each eligible veteran has basis entitlement of $36,000 for loans of $144,000 or less and bonus entitlement of at least $68,250 to use for loans over $144,000.
A borrower has used $105,000 of her entitlement on a prior loan which has been repaid in full and entitlement restored.
It is only practical that you're sure you are getting the best VA mortgage interest rates that are available for you on your VA loan. In the past few years we've seen both conventional loans and FHA loans tighten their credit and down payment requirements. Previously, there were many bad credit lenders that would offer sub prime mortgages with no money down, but since the housing crash, this is no possible.
And if you are purchasing a house, you are asked to pay up to 4% of the closing expenses, based on the purchase price. VA closing costs are usually lower than conventional financing costs because there are no "junk fees" allowed per the VA guidelines.
Because the program is specifically for restructuring current VA mortgages it is often possible to get one of these loans faster than other similar loans and usually with less documentation. And, a VA home loan is the only option left for zero-down, 100% refinancing. With zero down, 100% refinancing, no private mortgage insurance and no prepayment penalties, the VA mortgage program is hard to beat. Today, the maximum loan amount the VA will guaranty is $417,000 - decades apart from its original $2,000. The conforming loan limit in his county is $625,000. The amount of bonus entitlement is arrived at by taking the annual Freddie Mac conforming loan limit for your county, multiplying it by 25% and then subtracting basic entitlement of $36,000.
VA-eligible borrowers may find a VA home loan easier to get than other conventional loans.
Also, just like purchase loans, VA-eligible borrowers can now refinance up to 100% of the appraised property value.

Article Source: ABC Article Directory

About The Author: Amy Brown runs VA Loan Questions.