Question:

What to know about a VA guaranteed home loan benefits?

Answer:

A VA guaranteed home loan is one partially secured by VA. Most banks, credit unions and mortgage companies make VA guaranteed home loans. VA secured mortgages allow for eligible borrowers (veterans and active duty personnel) to obtain most favorable loan terms.

VA Guaranteed Mortgages Benefits

The VA guaranteed loans are 25% insured by VA for amounts up to $417,000. Jumbo VA loans are available but the VA insurance still covers up to 25% of the VA approved amount. For larger loans, different rules apply - borrowers are expected to make a down payment and/or pay mortgage insurance for the part of the loan exceeding the VA approved limits.

VA loans don't require down payment. Only the VA funding fee, obligatory for almost all VA loans, will be bigger in case of no down payment but it could be financed into the loan. Veterans, receiving VA compensation, are exempt from a VA funding fee.

Closing costs are comparable or lower than those of conventional loan financing and there are no mortgage insurance premiums or prepayment penalties. Also, VA provides assistance to veterans experiencing financial hardships.

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