4 Things to Know About the VA Loan
The VA Loan is an amazing benefit available to eligible Active Duty Military, Reservists, Veterans, qualified members of the National Guard, and some surviving spouses.
What's makes a VA Loan so special? We've outlined the four best benefits of a VA Loan below.
1. There are no loan limits
Under the Blue Water Navy Vietnam Veterans Act of 2019, the VA Loan limit was eliminated on January 1, 2020. This means that qualified VA buyers may borrow above the conforming loan limits without making a downpayment on their home purchase.
Although the loan limits have been lifted, borrowers must still prove that they reach the minimum credit requirements, have enough income to comfortably make the minimum payments, and that the home's appraised value matches the purchase price.
2. Private Mortgage Insurance (PMI) is not required
VA borrowers are not required to pay costly private mortgage insurance, which is typically required by lenders when putting less than 20% down on a home. PMI can cost anywhere from .5% to 1.5% of a loan and is typically rolled into the monthly mortgage payment. VA borrowers can save hundreds of dollars each month by not paying PMI.
3. There is no downpayment required, but there is a funding fee
While eligible VA borrowers are not required to make a minimum downpayment, they are still required to pay a “funding fee.” In most cases, the funding fee can be rolled into the loan amount.
Below is the funding fee chart, which highlights the funding fee incurred by borrowers, depending on the Loan type, down payment amount, and how many times they’ve used their VA loan benefit.
Veterans receiving any disability income from the VA are exempt from paying the funding fee. Purple Heart recipients who are still serving on active duty are also exempt from paying the funding fee.
4. There are still no limits to how many times you use a VA Loan
There is no limit to how many times you can take out a VA Loan, only a limit on how much you can borrow at one time. Once an eligible Active Duty, Veteran, Reservist, and or eligible surviving spouse has access to a VA Loan, it will never go away.
The information contained herein (including but not limited to any description of lending programs and products, eligibility criteria, interest rates, fees, and all other loan terms) is subject to change without notice. This is not a commitment to lend.
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