Is there a maxium interest rate that can be charged?
2007-03-17 16:58:30 · 6 answers · asked by eware1842@sbcglobal.net 1 in Politics & Government ➔ Military
A veteran using his/her VA loan eligibility is entitled to lower rates, usually doesn't have to pay points, can get a 100% finance and there are certain mortgage fee that you don't have to pay.
2007-03-17 17:03:55 · answer #1 · answered by uamsRN 1 · 0⤊ 0⤋
The VA loan can be 100 financed, so you don't have to pay a down payment. Many conventional loans will require you to pay monthly private mortgate insurance if you don't have a down payment, but the VA loan does not. That is the main advantage.
Do keep in mind that the VA charges a percentage fee to the loan - this is tacked on to the mortgage amount. So if you finance 100% of your home, the mortgage is actually for 102.6% or something of the purchase price. Every time you use the VA loan, that fee goes up. The VA loan is also not usually assumable. If you want to use the VA loan again, you have to sell the home and pay off the loan to re-gain eligibility. It's not a big deal, but things can get kind of tricky when trying to get the correct paperwork to close on the new home.
EDIT: I just read someone else's answer - there ARE closing costs on the VA loan, just like with any other loan. I think what he was referring to is the VA fee - you can choose to pay it upfront with your closing costs, but most people roll it into the loan.
2007-03-18 03:35:19 · answer #2 · answered by Cloth on Bum, Breastmilk in Tum! 6 · 0⤊ 0⤋
The VA sets the interest rate and you don't have to pay PMI because the VA guarantees the loan amount if you default. However, there is usually an origination fee for using the VA loan unless you are a compensable-disabled veteran.
2007-03-17 17:05:01 · answer #3 · answered by In 2 Deep 3 · 0⤊ 0⤋
1. No down payment required.
2. The VA GUARANTEES that your loan will be paid off if you default. However, the VA will then come after YOU for the balance.
3. The interest rate is the one YOU agree to with whoever you get your loan through. ( I got mine through a bank and they sold it to an out of state, inept mortgage company who got my loan all screwed up.)
2007-03-18 17:57:18 · answer #4 · answered by Anonymous · 0⤊ 0⤋
A VA loan has no closing costs with a low fixed interest rate. Before you could only get one VA loan per life time, however now when you pay off your last loan you can get another.
2007-03-17 17:46:39 · answer #5 · answered by Joseph P 3 · 0⤊ 0⤋
I bought my home under a VA mortgage.
The major advantages for me was no down payment (only closing costs) and a favorable interest rate.
2007-03-17 17:09:43 · answer #6 · answered by LeAnne 7 · 1⤊ 0⤋