Veterans Administration loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase or the refinance of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a purchase for a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans. Unlike other loan types, refinancing to a VA loan, you can get up to 100% of the value of your home even with cash out.
Other benefits of a VA loan include:
- Negotiable interest rate.
- Closing costs comparable – and sometimes lower - than other financing types.
- No private mortgage insurance requirement.
- Right to prepay loan without penalties
- Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
- Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.
Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.
Only Veterans can apply for a VA loan and a Certificate of Eligibility from the Veterans Administration must be presented to the lender to qualify for the loan.
MK Mortgage Group is proud to participate in the VA home loan program.