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Cost-effective and Manageable VA Loans for Veterans and Servicemen

By Randy Robinson Subscribe to RSS | March 6th 2012 | Views:

A VA loan is a real estate loan offered by the US government to eligible veterans. During President Franklin D. Roosevelt's term, the Congress passed a legislation that enables the Department of Veteran Affairs (VA) to issue mortgage and business loans to war veterans. It helped millions of veterans back then, but private lending institutions such as mortgage banks offer majority of the loans to veterans and other qualified candidates nowadays.

Before, only those who are active in combat are provided the option to use the program, but in 1992, amendments were carried out to allow service staff, as well as reservists and National Guard members who served the government for six years, to apply for VA mortgage loans. Surviving spouses of deceased veterans were also permitted to register for VA loans. Nevertheless, the veteran should die while on duty before the surviving partner can qualify. The method usually takes 2-3 months before the death is proven and the mortgage is approved.

One advantage of getting a VA loan is that borrowers can receive as much as the value of the house. For borrowers, this is a big comfort—they do not need to find another creditunion to fill the remaining amount. However, there are some constraints that concern VA loans-- some can only get as much as $1,000,000.

The interest rates are also negotiable in VA loans. Applicants can decide whether or not to get a VA home mortgage loan with a fixed interest rate, or a mortgage with an adjustable rate. Fixed rate loans typically have 10-30 years amortization terms, while adjustable rate loans only have an average of five years. By having different loan plans such as these, borrowers have the privilege to decide which loan scheme they assume is ideal for them. Though interest rates are flexible, it doesn't essentially suggest that applicants with bad credit ratings can be qualified.

A few VA home mortgage loans are given without down payments, while others do have. Loan providers can ask for deposits as high as 25 % of the overall amount if the applicant took a big VA loan or if the financial institution discovers that the acquisition price is more than the amount of the supposed cost of the house. Finance institutions rarely impose a down payment if the mortgage is over $625,500.

VA mortgage loans do not have mortgage insurance premiums so VA loan applicants pay smaller monthly payments than people who have a private mortgage insurance(PMI). Indeed, VA loans provide a significant convenience to all certified members.

Randy Robinson - About Author:
For more details, search VA home mortgage loan, VA home mortgage loans, and VA mortgage loans in Google for related information.

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