Compared to other types of mortgages, VA loans have more relaxed and flexible requirements. They don’t require a high credit score and their interest rates are generally lower than most conventional mortgages. Another advantage is that you can get it without down payment and you won’t have to pay mortgage insurance.
With awesome benefits, you may surely have questions about this type of mortgage. Here are the common questions and answers about VA loans:
Who are eligible to apply for this loan?
Veterans, military members, reservists, as well as National Guard members and spouses can apply for this loan. Active duty members usually qualify after six months of service, but reservists and National Guard members may have to wait. You can visit the official website of the U.S. Department of Veterans Affairs for detailed eligibility requirements.
Is there a limit on the amount you can borrow?
No. There’s no maximum mortgage amount for VA loan, but there are limits on how much liability the VA can assume. Lenders and VA loan companies will not go beyond county limits (these vary from county to county).
What is the credit score requirement?
There isn’t a minimum credit rating requirement, but most lenders are looking for at least a score of 620. It’s a good idea to do your best to improve your score to get the lowest rates possible.
Does it require an appraisal/home inspection?
An appraisal is required when buying a home with a VA loan. This is to assess the condition and value of the property. A home inspection is not required when buying, but is always advisable to have the property inspected.
What about VA loan closing costs?
These loans have closing costs and don’t have strict requirements regarding such fees. The closing costs can be between 3% and 5%, but this can still depend on how much you are borrowing. VA loans, furthermore, limit what you can pay in closing costs, as there are some fees that you are not allowed to pay.
Are there prepayment penalties?
No. This means that you won’t have to worry about penalties for paying off your mortgage early or refinancing.
You may be able to save more if you can qualify for this loan. Work with a reliable VA loan company to learn more about this mortgage and find out if you meet the eligibility requirements.