Using VA House Loans to Purchase Foreclosures

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VA house loans are not made by the Department of Veterans Affairs; they are made by approved VA loan lenders such as banks and mortgage companies.

VA house loans are loans that are guaranteed by VA and made to eligible veterans for the purchase of a home. The veteran must occupy the property, it can’t be an investment property. If you are a non-veteran or an investor you may want to check out the Advantages of VA Vendee Financing.

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VA FUNDING FEE UDATE

"Effective October 1, 2011, the VA Funding Fee will be decrease for Veterans, Reservists, and National Guard members. First time users will have their VA Funding Fee reduced from 2.15% to 1.40%.

Subsequent users' fee will go from 3.30% to 2.80%. Fees will again be reduced next year. This is great news for your veteran and will make subsequent users more apt to use a VA home loan for their next purchase."

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The VA guaranty of the loan helps the veteran to obtain a loan with no money down at favorable VA loan interest rate.

The veteran has to be Va loan eligibility for the loan. The veteran has to get a Certificate of Eligibility. It may be possible to get a Certificate of Eligibility from their approved VA loan lender. Most lenders have access to the Web LGY system. This Internet based application can establish eligibility and issue an online Certificate of Eligibility in a matter of seconds.

You can also apply for a Certificate of Eligibility by submitting VA Form 26-1880. If you are planning on using VA house loan you should get your Certificate of Eligibility before you start looking for a house.

Obtaining a VA House Loan is fairly easy and similar to obtaining a FHA loan. Your entitlement or eligibility does not guarantee that you will get the loan.

Lenders must comply with VA income and credit standards and the veteran must be a satisfactory credit risk. The income of the veteran and spouse must be shown to be stable and sufficient to meet the mortgage payment plus the costs of owning a home.

How much is your entitlement or how much is your VA loan limit?

The basic entitlement is $36,000. You may think you can’t get much of a house for $36,000! Well, what VA loan lenders will do is lend up to 4 times the amount of a veterans entitlement without requiring a down payment. That means the lender will lend up to $144,000 without a down payment.

OK, we still are not done yet. For VA house loans in excess of $144,000 to purchase a home, additional entitlement up to an amount equal to 25% of the Freddie Mac conforming loan limit for a single family home may be available. This loan amount is a moving target and it changes yearly.

VA House Loans | There are many benefits to VA Housing Loans

If you are a veteran then you have earned the many benefits of a VA home loan and you deserve each and every benefit that this country can provide you!

Here are a few of the benefits of a VA house loan:

1. Equal opportunity for all qualified veterans to obtain a VA house loan.

2. No down payment. As long as the house appraises for the purchase price the veteran doesn’t need a down payment.

3. An VA appraisal is required just informing the veteran of reasonable value.

4. Because VA will guarantee the loan the VA loan interest rate is negotiable.

5. Closing costs are comparable or lower than other ways of financing.

6. The VA Guaranteed Loan is assumable, subject to VA approval of the assumer’s credit. This feature would be great advantage if interest rates increased. Back in the late seventies and early eighties VA assumable loans were in demand.

7. No mortgage insurance premiums.

8. Right to prepay without penalty.

9. Low interest rate. VA home loans interest rate is currently 3.99%. Check with you lender because the VA interest rate is always changing with the market.

One big disadvantage is the VA funding fee, but it can be financed into the home loan(See VA Funding Fee Update above).

You can also use VA home loans to construct a new home.

VA house loans can be a great source of financing if you are a veteran either to purchase a HUD or VA home foreclosures.

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