VA guaranteed loans are made to eligible veterans for the purchase of a home which must be for their own personal occupancy. With a loan approval, VA will guarantee a portion of the loan to the mortgage lender.
This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. A veteran still has to be qualified for their income and credit for the asking price of a purchase. 100% financing is subject to Veteran’s eligibility.
VA Loans offer the following important features:
• Equal opportunity for all qualified veterans to obtain a VA loan
• No down payment (unless required by the lender or the purchase price is more than the reasonable value of the property).
• Buyer informed of reasonable value.
• Negotiable interest rate.
• Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5% and exemption for veterans receiving VA compensation).
• Closing costs are comparable with other financing types (and may be lower).
• No mortgage insurance premiums.
• An assumable mortgage.
• Right to repay without penalty. VA assistance to veteran borrowers in default due to temporary financial difficulty.
