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Veterans Administration Loans – Many Advantages To Avail
As a veteran American struggling to meet your home mortgage debt obligations, you will be happy to know about options other than conventional FHA financing. The VA home loans that have been structured under such programs have enabled many to comfortably settle their debt and move on in life.
Let us Look at some of the Advantages you can Enjoy through this Type of Loan
The first and most important aspect of such loans is the absence of any down payment. All of us are aware of the struggles we face when asked to make down payment compulsorily. Here, the choice is yours and depending on your capacity, you may make the down payment you wish to. Typically, other loan types specify or mandate a 3.5% down payment clause but thankfully here, you are not faced with that stipulation. This is the only kind of home loan that provides 100% financing to the borrower.
There may come times when you want to opt out of the loan you have taken and close out. With conventional loans, you have to incur a cost for it which may have the homeowners insurance, escrow fees, title insurance, taxes and so on. All of this can be quite a drain on your pocket and ironically may even make you think twice about opting out. The best aspect is that there is a limit placed on the buyer as well should he be willing to pay the costs and therefore it is easy on the pocket for both the buyer and seller.
Certain costs like notary fees, documentation preparation, communication costs and processing fees are totally kept out of the ambit of closing charges when you take this loan.
When you buy a home through the usage of a conventional loan, you would have to get your property appraised in order to ascertain its current market value. The loan you take under the Veterans Administration system however entitles you to a certificate of fair or reasonable value that is valid for 6 months and thus makes it easy for you to sell the property without having to incur the appraiser’s cost every 2 or 3 months down the line.
Advantage for the Buyer as Well
Furthermore, even the inspection that is carried out by the VA inspector will ensure that the buyer too is not hoodwinked to buy something that is not of a set or specified standard. The VA inspector ensures that all codes and criteria are met under their guidelines and only then is the buyer let in to negotiate about the rates and other formalities. It is thus a system that is absolutely fair to the seller and the buyer and a win-win situation overall.
As a buyer making use of such a loan, you have a choice of refinancing at a lower interest rate. You can avail this without having to undergo any exhaustive documentation or appraisal processes. You do not even have to pass a credit check. The system is thus unobtrusive, transparent and fair to all parties.
You will not have to shell out any exorbitant service fees either when availing of VA home loans. These charges are called points and are charged by brokers when you take conventional loans. Here this amount is capped. Moreover, any loan you take can be seamlessly assumed by any other veteran seeking such a loan. The VA norms allow the buyer to take over the existing loan and continue to service it.