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The Curious Bag
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A VA mortgage is a home loan available to certain veterans who receive backing from the Department of Veterans Affairs. The backing makes the loans less risky for lenders, which helps the veterans be approved for mortgages.
Down Payment
VA loans do not require any down payment. According to Bankrate.com, more than 90 percent of people who take out a VA loan do not make a down payment.
Private Mortgage Insurance
The Veterans Affairs Department forbids lenders from charging for private mortgage insurance.
Funding Fees
The VA does impose a fee at the start of the loan for the VA backing of the loan. For first time loans without a down payment, the fee equals 2.15 percent of the loan. With a down payment more than 10 percent, the fee drops to 1.25 percent fee.
Eligibility
In order to be eligible for a VA loan, you must meet the time in service requirements. These requirements vary based on when you served and whether it was during a war or peacetime. In addition, you cannot have been dishonorably discharged.
Loan Limits
The Veterans Affairs Department does not limit the size of the loan, but does limit the amount of the guarantee to 25 percent of the loan limit. The loan limit varies per county and is adjusted each year.
Source:
Bankrate: Pros and Cons of VA Loans
VA Loans: VA Loan Mortgage Funding Fees
National Bank Of Kansas City: VA Loan Basics
More Information:
U.S. Department of Veterans Affairs: General Rules for Eligibility
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