VA Loans



VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase 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 VA guaranteed loan.

Some Other Benefits Include:

• Negotiable interest rates.
• Closing costs are comparable and sometimes lower - than other financing types.
• No private mortgage insurance requirement.
• Right to prepay loan without penalties
• The 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.

While mortgage insurance is not required, the VA requires 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. A VA loan can be used to buy a home, build a home, and to improve the home with energy-efficient features such as solar panels or other energy-efficiency improvements approved by the lender.

Anyone can apply for a VA loan by contacting any VA mortgage lender. You just need to have a Certificate of Eligibility from the VA to qualify for the loan.

FHA Loans

FHA loans are mortgages that are insured by the Federal Housing Administration. Unlike conventional loans, FHA loans are designed for borrowers who might not be able to qualify for a conventional loan. FHA loans are government-insured and thus carry an extra layer of protection for lenders. People who don't have large amounts of cash to put down on homes can get FHA loans. These loans are usually a little more expensive than conventional loans, but buyers don't need to put as much money down.

Some Benefits Include:

• Only a 3.5% down payment is required
• The mortgage insurance premium is for the life of the loan. (The only time ever that mortgage insurance is automatically cancelled is on conventional loans)
• More flexible underwriting criteria than conventional loans
• FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
• Loans are assumable to qualified buyers

USDA Loans

USDA allows for 100% financing in rural areas to low-to moderate income borrowers.

Some Other Benefits Include:

• No down payment option
• No prepayment penalty
• Competitive interest rates
• The loan term is 30 years and it is fixed rate.

A USDA loan is a mortgage loan made by the United States Department of Agriculture to low-to-moderate income borrowers. The USDA program is designed to help rural residents finance the purchase or construction of their homes.