VA Loans
Description:
VA loans are loans guaranteed by the US Department of Veterans Affairs (The VA). These loans are for veterans of the United States Armed forces, the Coast Guard and National Guard who have not been dishonorable discharged and if you served during wartime been on 90 or more days of active duty and if you served during peace time have served at least 181 days of active service. There are service requirements to qualify and you must be dishonorable discharged. This loan primarily comes as a 30 year fixed rate, but other terms and an adjustable rate loan feature is available. If you are a veteran, this is your loan of choice, because there is NO DOWN PAYMENT requirement. It also comes with a low interest rate (similar to FHA), it and only has an upfront guarantee fee, (not upfront and monthly like FHA). It also has a higher loan limit than FHA up to $417,000 (up to $625,000 for Alaska, Guam Hawaii and the US Virgin Islands like Fannie Mae) for a single family residence. For more information go to the VA website at http://www.homeloans.va.gov/veteran.htm. They also publish a free guide, which is available in a PDF format at http://www.homeloans.va.gov/pdf/vap26-4.pdf.
Advantages:
- No down payment is required.
- Low fixed interest rate (adjustable rate loan is available).
- No monthly mortgage insurance to pay.
- Same loan amounts as Fannie Mae and Freddie Mac.
- The loan is assumable.
- Relatively easy credit approval.
- Very easy to refinance with a “VA streamline refinance” without having to be reapproved.
Disadvantages:
- Only for Veterans that qualify.
- Can not do loans larger than $417,000.
- More paperwork. You need to get your “VA Certificate of Eligibility” before starting, or the process could be lengthy.
- Can only be processed as a full documentation loan.
When to use this loan:
- If you are a veteran and have not used your VA eligibility, this is the loan of first choice.
- If the loan is under $417,000.
MCA offers a product to protect you against potential mortgage fraud and over-charging. It is called the Consumer Protection Plan. A Mortgage Professional will review your initial mortgage disclosure documentation and when the loan is ready to close the MCA professional will also review your closing settlement documents to make sure you received the correct program, rate and fees as initially disclosed.
