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Advantages of VA Loans over Conventional Loans

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Advantages of VA Loans over Conventional Loans

Windowofworld.com – Getting a home loan to buy property can be stressful and massive experimentation in the bureaucracy. Military veterans can avoid many of these things with a VA loan.

Advantages of VA Loans over Conventional Loans

If you’ve never served in the military, getting a home loan can be frustrating. The amount of documentation you have to provide can be staggering. After you turn in the first stack of documents, lenders can ask for more. After a while, you begin to wonder if you are applying for a home loan or looking your way through the pearl gates. For veterans, getting a VA home loan is very simple.

One of the main advantages of a VA loan is the application process. It’s so simple, someone tends to laugh when walking past it. The first step is to contact your local VA office and apply for a Certificate of Eligibility. Once approved, you will go home hunting and find the house you want to buy. You then contact a VA approved lender. The lender will order an appraisal, withdraw credit and ask for an income statement. Basic closing tasks are performed such as title checking. If no problems arise, the lender takes out the loan and you move on.

In many situations, the VA has created a faster process for veterans to get approved. One of the longer tasks of loan approval is the appraisal process. To put it simply, VA has a program known as the Lender Assessment Processing Program. Lenders approved for this program can essentially accept the appraisal as a carte blanche appraisal and issue a loan against that amount. This can greatly speed up the approval process for veterans.

The added advantage of a VA loan concerns the pocket costs of actually buying a home. While most non-military borrowers expect a ten to twenty percent down payment, VA loans often require little or no down payment. This allows veterans the opportunity to buy property without having to go through the process of saving for a down payment.

Personal mortgage insurance is the bane of most borrowers. Most lenders require a PMI when the borrower defaults to pay at least 20 percent of the sales price as a down payment. PMI is necessary because lenders want to cover the risk of default on the loan before there is much equity in the property. There is no PMI requirement for VA loans, as there is no risk if the government guarantees repayment. This advantage can save the borrower thousands of dollars.

The above represent only a few of the many benefits that can be obtained with a VA loan. Contact your local VA office to find out more about whether you have served in the military.

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