A VA home loan is truly one of the best benefits available to U.S. Veterans today. And a much deserved thank you for serving us and protecting our freedoms. There are many features of VA mortgage loans that are worth mentioning:
- There is a ZERO downpayment requirement, by far, one of the best features. This allows Veteran buyers to keep more cash in their pockets.
- The sellers are allowed to contribute as much as 6% towards the closing costs of the home purchase. This is the most allowed of any loan product. Again, helping buyers who are low on cash.
- Buyers can have a choice of fixed-rate or adjustable rate mortgage.
- The VA loan limit* is currently $625,500 in Frederick and Montgomery Counties, and $500,000 in Howard and Carroll Counties, giving buyers in high-value areas more choices.
- *VA loans don’t have limits, they actually have a limit on the amount they guaranty. This allows the lender to offer VA loans at more favorable terms.
- There is no private mortgage insurance required, which shaves a significant amount off of the monthly payment.
- There are limits to the amount the lender can charge for closing costs.
- There is no penalty for early loan pay-off.
- A VA mortgage loan is assumable.
- Veterans who have had a VA loan before may still be able to get another VA loan.
- VA may be able to provide some assistance if the borrower runs into financial difficulty.
- VA also offers Cash-Out Refinance loans.
We don’t hear much news about assumptions when the rates are low, but we do when they have increased after a time of low mortgage rates (which we expect to happen next year). When rates increase, as they are apt to do when the economy starts to recover, the lower rates of an assumable mortgage will be very attractive to buyers.
In 5 to 7 years, a Veteran homeowner who has purchased at today’s rates of 4-ish% and puts his house on the market, will be at a great advantage. A future qualified buyer can assume that mortgage in a market where rates could feasibly be 5%, 6% or even higher. This puts that home seller at a great advantage.
With today’s historically low interest rates we’re seeing the most affordable real estate market in decades. The present market is a great opportunity to buy Frederick Real Estate.
For More Resources on VA Mortgages: http://www.benefits.va.gov/homeloans
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