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A VA home loan is a home loan that is guaranteed by the
Department of Veterans Affairs. The purpose is to offer
financing to eligible veterans and active servicemen and woman.
One of the major benefits of
a VA home loan is that eligible veterans are not required
to put down any downpayment. In fact many veterans can
purchase a VA home with virtually NO MONEY DOWN!!
Another benefit is that a VA
home loan veteran does not have a monthly mortgage
insurance premium like FHA or Conventional Loans. This can help
keep the mortgage payments more affordable.
Also, VA will allow a veteran
to refinance and take cash out of the property to payoff
bills or whatever purpose is needed up to 90% of the homes
value. Many other programs limit this.
While a VA home loan is a
great loan there are some items that Veterans should make
themselves aware.
VA Funding fees can be
expensive if you use your eligibility more than once. As
high as 3.3%.
If you have 20% equity in the
property it may be cheaper to refinance on a conventional
loan and avoid the VA funding fee.
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