VA Loan Basics – Series part 1

Here are some of the basics on VA loans.

Part 1 of this series just kind of explains what a VA loan is.
  • mortgage loan guaranteed by the U.S. Department of Veterans Affairs (VA).
  • The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses
  • The original Servicemen's Readjustment Act, passed by the United States Congress in 1944
  • Basically… its like mortgage insurance for lending institutions for Veterans who qualify
  • The VA Guarantee is 25% of loan amount (up to entitlement max)
    • Meaning Lending institutions will get back up to 25% of your loan amount in the event of a foreclosure (which typically will cover all their losses)
  • Protects lender from loss up to the amount of the guaranty
  • Increase buying power for Veterans
  • 100% loan-to-value ratio = $0 down loan
  • No mortgage insurance requirements = lower monthly payments
  • Lower interest rates since the loan is backed by the Federal government
  • Fast and easy UW approvals
  • Flexible guidelines
  • Higher DTI approved
  • No minimum credit score
  • 90% loan-to-value ratio on cashout refi
  • Assumable by a qualified borrower

Next... Part 2: Common Minsconceptions on VA loans

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