VA Loans
VA
loans are designed to benefit veterans of the armed services, those
currently in active duty or the reserves, and their spouses. VA
guaranteed loans are made by private lenders such as banks and mortgage
companies to eligible veterans for purchasing a home. The guarantee
protects lenders against loss if the borrower defaults on the loan,
which would normally be covered by a down payment and/or mortgage insurance.
VA
loans require no down payment with 100% financing available. No
private mortgage insurance is required, there are no prepayment penalties,
and the seller can pay all of the closing costs. This program
has competitive interest rates, and it can often be easier to qualify
for a VA loan than a conventional loan.
The
maximum VA home loan is $417,000. Larger loans are available but
require a 25% down payment for any amount over $417,000. A funding fee
of 2% of the loan amount is required for VA loans and can be added to
the total loan amount. A home purchased with a VA loan must be
for the borrowers own personal occupancy.