Almost all home loans were conventional loans four years ago. Before the financial crisis, and mortgage melt down, offering no money down home loans were the way to go. Very few borrowers would like to apply for FHA or VA home loans if products like 80/20′s didn’t have mortgage insurance.
The financial attitude today is to a large extent different. A 100% financing, as banks realized, were a bad idea when foreclosures started running out of control and home prices fell down. Potential borrowers need to have something at risk. This has really slowed down the housing market, as it is hard for American’s to save up sufficient money for real estate down payments. Yet, no money down loan options is still available for qualified individuals. VA Home loan is one of these programs.
For Veteran’s who want to buy a house, the VA loan is one great program for you. It is one of the few available loans that truly offer 100% financing. If you have served active, full time, military service for at least 180 days, you could be pre-approved for a VA home loan. Not only active, full time, military service individuals can qualify for this loan, but also spouses of deceased vets.
The VA loan offers very liberal debt to income ratios. The debt to income ratio qualification of VA home loans is up to 50% debt to income ratios. No monthly mortgage insurance is what makes VA home loans different and more affordable than FHA loans. The upfront mortgage insurance is 2.15%, which is more than FHA loans, but slightly less than USDA rural housing loans. Likewise, the interest rate is similar to conventional and FHA rates.
The approach for Issuing home loans for the veteran’s administration and other mortgage programs are distinctive from each other. The VA home loan aims to help those who serve the country have a home. Other loan programs are very careful that they only give loans to well qualified buyers. With VA home loans, income, employment, and credit requirements are not nearly as strict as compared to that of FHA and conventional loans.
