Is A VA Loan Right For You?
Most people turn to mortgage lenders when they want to purchase homes. The reason is that saving enough money to pay for a house isn't simple. It takes years to save this much money. So people turn to mortgage loans to purchase homes. Then, they make payments for 15 or 30 years to repay this money. You might wonder if a VA loan is the right option if you need a home loan. Here is a guide to help you learn more about VA loans.
You must get a COE
First, people can only get VA loans if they can get a COE, which stands for Certificate of Eligibility. The Department of Veterans Affairs (VA) is a governmental entity that insures VA loans. Thus, you must start by obtaining a COE. A COE proves that you have the veteran experience required for these loans. You can look this up to determine if you meet the criteria to get a COE. If you can't get one, you can't get a VA loan.
Learn the loan requirements
The next thing to do is to learn the loan requirements. First, you might be able to borrow up to 100% of the home's purchase price. However, you might need to have a certain credit score. The VA doesn't dictate the required credit scores. Instead, the lenders do. Thus, you can talk to your lender to see if you meet this requirement.
Understand the benefits
In addition to buying a house without a down payment, VA loans offer many benefits. First, you won't pay private mortgage insurance (PMI). PMI is an extra expense some people pay with loans when they put less than 20% down. However, VA loans don't require this payment. They do require a one-time fee, called a funding fee. This fee goes to the VA, and they use it to help other veterans. The fee varies, but you'll pay a lower fee if you put more money down on the home purchase. Next, you can compare the interest rates of VA loans to other loan types. When you do, you'll see that they're similar. VA interest rates are competitive.
Talk to a mortgage lender
This article outlines some basic principles of VA loans. You might think that a VA loan sounds right for you after reading these things. If so, talk to a lender to learn more about the application process and other details.
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