One of my favorite loans to service is the VA Loan because it means I have the opportunity to help those who put their lives on the line for all of us.
VA stands for the United States Veterans Administration. In order to quality for a VA Loan, you have to be a veteran, but this loan is by far, the best loan product available. Every veteran who is honorably discharged and did a certain number of years of service, they've got an entitlement amount. That calculation tells us how much they can and can't borrow. The VA Loan is also available to qualified spouses of veterans.
It offers a hundred percent financing.* The VA also dictates to us, as the lender, what costs are allowable and what costs are not allowable. For instance, the veteran cannot under any circumstances, pay for a termite inspection. Innovative Mortgage Services waives all of our origination fees on VA Loans, so that's a savings of about another $1,300.
The primary benefit to the VA loan over the others, is mortgage insurance. On your FHA loan you have mortgage insurance. On your USDA loan you have mortgage insurance. On your conventional you have mortgage insurance. If you don't put down 20%, you've got to have mortgage insurance.
A VA loan doesn't charge any mortgage insurance. On a USDA loan, that mortgage insurance is .35% of the loan balance each month. On a FHA loan it's .85%. On a conventional loan, it's risk-based. They look at your credit score. You're talking a possibly a couple hundred dollars a month difference. And that's a savings of a couple hundred dollars a month that can go to other expenses.
VA Loans are designed primarily for primary residences. But if there are extenuating circumstances, like if you’ve moved from one side of the country to another side of the country, you can do what’s called a secondary; and still be eligible for a VA loan. You can even do a refinancing with a VA Loan.
NMLS ID 1233387
*Loan approval and terms are dependent upon borrower’s credit, documented ability to repay, acceptability of collateral property, and IMS underwriting criteria. USDA and VA loan programs allow 100% financing for those who qualify. USDA loans have location restrictions and income limits. For more information on RD loans, including RD eligibility, please visit http://www.rurdev.usda.gov/HSF-About_Guaranteed_Loans.html. VA loans require borrowers to have VA eligibility through Veterans Administration. For more information, please visit www.benefits.va.gov/homeloans.