VA Mortgages are loans backed by the Veteran's Administration and allow for qualifying military veterans and/or active duty service members to put no money down without having to pay monthly mortgage insurance. VA loans do charge an up front fee called a VA Funding Fee rather than charging monthly mortgage insurance. This fee is waived if the VA considers you a disabled veteran. The VA also allows for veterans with less than perfect credit and those with higher qualifying ratios to still qualify for home purchases. Property requirements are stricter than those for conventional loans intended to protect the veteran. Maximum loan amounts do apply to VA loans, contact Lance for details.
The VA only offers fixed rate loans on both 30 and 15 year terms, as well as a 2/1 Buydown option. This Buydown option allows for the lender to temporarily buydown the interest rate on the loan 2% for the first year and 1% for the second year. This loan is actually a fixed rate loan that the lender actually pays the dollar difference between the actual rate and the lower rate. For instance, the actual fixed rate is 8%. The responsible party pays the dollar difference between an 8% payment and an 6% payment for the first 12 months, and then the dollar difference between an 8% payment and a 7% payment for the second 12 months. This amount is paid at closing. Should the loan be paid off prior to the third year, the unused dollars are refunded to the veteran. Buydowns are only available on purchase transactions.
Please note that all VA loans have non-qualifying refinance options. Please contact Lance for details.
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