The Pros And Cons Of VA Loans

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The Pros and Cons of VA Loans
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The Veterans Administration guaranteed home loan
program has allowed millions of veterans and
active duty service members an affordable way to
own their own homes.
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The program does not provide home loans for
veterans. Instead, it guarantees loans given by
private lenders.
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A look at the pros and cons of the program can
help homebuyers determine if a VA guaranteed loan
is right for them.
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Pros of VA Home Loans
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The VA home loan program is popular because it
offers homebuyers a number of advantages
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Little or no down payment is required
Homebuyers can purchase a home sooner because
they do not have to save for the large down
payment required by lenders offering conventional
loans.
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Competitive interest rates - Because the risk
for repayment of the loan is covered by the
federal government, lenders can offer lower
interest rates.
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The purchase price of the home is assured A
VA appraisal ensures that the home is worth the
value of the loan.
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Closing costs are limited The VA program will
pay customary closing cost items, but not
additional costs.
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No prepayment penalty Homeowners who then
sell their property do not have to pay a penalty
for paying off the loan earlier than its term.
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VA loans are assumable The homeowners can
offer the favorable mortgage terms to a
subsequent buyer.
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Forbearance for financial difficulties If the
homeowner has a financial setback and cannot make
payments, special terms can be negotiated for
them.
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Warranty for VA approved construction The VA
will assist in enforcing the builders warranty
for justifiable construction complaints.
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Cons of VA Home Loans
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A home loan through the VA program also has a
number of disadvantages that homebuyers should
take into account
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VA home loans are for the purchase of primary
residences - These loans cannot be used for
purchasing investment property or second homes.
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You must pay a VA loan funding fee The VA
imposes a fee on these loans to fund the program.
The fee can be rolled into the loan amount.
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Veterans who have service-related disabilities
are exempt from paying this fee. The funding fee
increases each time you use the VA home loan
funding program.
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Sellers may not agree to a sale with VA loan
A number of misconceptions regarding VA home
loans have contributed to seller reluctance to
enter the application process.
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However, sellers may be required to pay some of
the closing costs, and this expense may put
off some sellers.
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Loan limits and overlays may apply The VA
home loan program does not impose limits on home
loans. However, private lenders may have
additional requirements, called overlays, in
regard to loan amounts.
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These requirements help to ensure that the lender
maintains its favorable record with the VA.
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VA loans do not guarantee construction defects
Approval of the loan neither guarantees that
the property is free of defects, nor can it
compel the builder to correct any problems with
construction.
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However, it can suspend the builder from the VA
program.
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The VA program does not provide for legal
services, if necessary Any legal action against
the builder or previous owner is the
responsibility of the buyer.
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Our VA Loan Specialist helps veterans obtain the
loans they are entitled to.
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He served in the United States Marine Corps, and
now devotes himself to the Veteran home buyer in
the Phoenix area, fulfilling a passion of his
while at the same time helping others achieve
home ownership.
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Be a proud homeowner today. For more details
call 480-351-5904
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Visit the site at www.valoansforvets.com
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VA Loans for Vets 7702 E. Doubletree Ranch Road,
Suite 220 Scottsdale, AZ 85258 Phone (480)
351-5904 Email jimmyv_at_fcbmtg.com