When looking for a new home, many military families set out with a checklist of desired features such as more bedrooms for a growing family, extra counter space in the kitchen, or a larger backyard to enjoy. Having a checklist for your finances during the home-buying process is just as important, including selecting the right mortgage.
The VA Loan is a popular mortgage option for many servicemembers and their families and can provide financial benefits. Here are three things to consider when deciding if the VA loan is right for you:
1. Are You Eligible?
Most active duty members of the military, veterans, reservists and National Guardsmen are eligible for the VA Loan benefit. In addition, un-remarried spouses of military members who have died while on active duty or as a result of a service-related disability may also qualify. Before you are approved for the loan, however, you will also need to provide a Certificate of Eligibility (COE), which you may request during the preapproval process with your lender.
2. What Are the Advantages?
Once your eligibility is established and you are approved for a VA Loan, you may take advantage of these benefits:
- Limited to No Down Payment: One of the largest draws for the VA Loan is the ability to purchase a home without requiring a down payment. Some areas do have a borrowing limit, however, and you may have to provide a down payment if the home you’re interested in exceeds it.
- No Private Mortgage Insurance (PMI): Another advantage of the VA Loan is that it does not require PMI. Many conventional loans require PMI to protect the lender if the borrower stops making payments on the loan. Without this added expense, VA borrowers can afford to buy more home.
- Reused VA Loan Benefits: Once your original VA Loan has been paid in full, or if you use your entitlement to rent out your first home, your VA Loan benefits can be applied to purchasing an additional home without a down payment. Just be aware that, if you need your use your VA Loan benefits again, your funding fee may be impacted.
- Refinancing Options: The VA Loan can be refinanced, which provides you with more options to obtain a better loan with a better interest rate.
3. What Is the Main Difference?
The funding fee is the main difference between other types of low-down-payment loans and a VA Loan. Traditionally, the VA Loan costs less, although a one-time funding fee is required. The amount of the fee is determined by the amount of the down payment and the type of veteran, so you’ll want to do your research before deciding to use a VA Loan.
The best way to know if the VA Loan is the best option for you is to speak with a mortgage professional. The team of Mortgage Loan Officers at AAFMAA Mortgage Services LLC is available to discuss these options with you and to help you navigate your home-purchasing journey. You can reach us at 1-844- 422-3622 or visit us at www.aafmaa.com/mortgages for mortgage resources including an education center, checklists and calculators. We look forward to serving you, your family and the military community!
Use our calculators to help you determine how much your monthly VA Loan payment might be.
AAFMAA Mortgage Services LLC is an Equal Housing Lender and is a VA-approved lender not acting on behalf, in the direction of, endorsed or sponsored by the Department of Veterans Affairs or any government agency. This is not a commitment to lend or an offer and is for information purposes – Your actual rate, payment and costs could be higher. Not all borrowers will qualify. Up to $1,000 towards closing costs and free VA appraisal is good for loans that fund only during the time period stated (and not to loans that don’t fund beyond 9/30/2018). Get an official Loan Estimate before choosing a loan. This is for VA mortgages (refinance and purchase) only. NMLS ID # 1423968. http://www.nmlsconsumeraccess.org/. For further state licensing and disclosures visit www.aafmaa.com/mortgage. 639 Executive Place, Suite 203, Fayetteville, North Carolina 28305. 844-211-6308. Licensed Lender in Alabama 22416, Colorado, Connecticut ML-1423968, Delaware 0243333, Florida MLD1376, Indiana 34842, Kansas MC.0025489, Kentucky MC401802, Maryland 22541, North Carolina L-167411, Oklahoma ML011430, Lender and Broker in Rhode Island 17050098480, Pennsylvania 61781, Tennessee 135339, Lender and Broker in Virginia MC-6685. Contact AAFMAA Mortgage Services LLC for current rates and a full Loan Estimate. This is not an offer and rates displayed may not be available at the time of rate lock. On April 20, 2018 rates and fees for a 30 year term, $200,000, VA fixed mortgage, with a 720 credit score, in the State of North Carolina were 4.125% with an APR of 4.353%. Loan to value is 100%. Principal Residence. Payment does not include taxes and insurance premiums. The actual payment amount will be greater. Some state and county maximum loan amount restrictions may apply. Payment is $969.30 (principal and interest only). No prepayment penalties. Not all borrowers will qualify. This is good for loans that close. AAFMAA Mortgage Services LLC is a licensed mortgage lender located at 639 Executive Place, Suite 203, Fayetteville, NC 28305, NMLS # 1423968