Sometimes loans can be pretty dense, even more googling a loan you are unfamiliar with can often leave you even more confused after reading about it.
That being said i think that since buying a home is such a huge undertaking it is important to make educated and well informed decisions about your home loan and financing options.
I figured i would try to break down the various loans that every person should be aware of as concisely as i can without leaving out any important information.
The first loan i will delve into is the Veterans Loan, more commonly referred to as the VA loan.
The main benefits: No required down payment, no mortgage insurance, dont need perfect credit score to qualify for VA loan, and you can prepay your loan at any time without pre-payment penalties.
The loan is available as a 30, 20, or 15 year fixed rate home mortgage. The loan itself is governed not by some big bank but by the Department of Veterans Affairs.
Your fixed monthly payment will be based on: the current interest rate when you lock it in, your principal loan amount (what you are borrowing), and amortitized interest over the year amount term of your loan. In terms of credit scores, although higher is always better i have seen veterans with scores as low as 620 qualify.
If you are already locked in a mortgage that has a rate at least 1% higher then todays current rate and you plan to stay in your home for another ten years you can also think about a Veterans Refinance Loan. This lets you take advantage of the new low rates and save money on your payment. Veterans pay a reduced funding fee which makes it more affordable to get out of a bad interest rate loan.
If you have more in depth questions about the VA loan, you can call Treadstone at any time 616.774.9160 or for a less direct approach shoot me an email, firstname.lastname@example.org.
Of note- there is also a “Jumbo” VA loan that can be used to get much bigger loans.