If you served in the military, a VA mortgage, if you can qualify, supports the maximal amount of borrowing power with the lowest possible payment. Here are some things to consider when looking at a VA mortgage…
The US Department of Veterans Affairs guarantees loans up to 100 percent loan to value for purchase rate and term or cash out refinance loan scenarios. The VA mortgage contains a funding fee which will vary based on the size of a loan that you’re seeking, but the big benefit is you can finance with no monthly mortgage insurance of any kind. The VA will require you to provide a family budget with your loan application explaining how your monthly budget and finances work.
Other nuances to VA loans include other homeownership costs. The veteran is not permitted to pay per federal requirements; these include some specific fees that your lender will have to cover for you, so you automatically can receive a lender credit to cover such fees making this loan very affordable. VA loans are also very profitable loans to mortgage companies. As a by-product of this the rates on VA loans are exceptional, typically beating FHA and conventional loans in rate and on price on any given day.
To get a VA mortgage the property must clear a pest report. The veteran can pay for that pest report when refinancing. When buying a home, the pest damage can be paid for by the seller or buyer.
The property must clear a section 1 termite report, and if the property is on well-water and septic tank it must pass a well and septic report If the property is rural or in a county area with no city access.
If the property is on a shared private road with no public utilities in terms of road maintenance, there will need to be a shared private road agreement in place to get a VA mortgage on that property.
VA loans are for military veterans and their spouses and they also allow co-signers to co-sign on a VA mortgage. You must have at least a 15 percent equity position and the other people co-signing must live in the home.
VA mortgages also contain no maximum loan limit, so for example, looking at Sonoma County, in California the maximum loan limit for a VA loan is $704,950 for a 1-unit home which is the conforming high balance loan limit in that area.
You can get a VA mortgage far above and beyond this amount however the difference must be made up in the form of equity which is a function of your entitlement and a 25 percent coverage which is the portion of the loan the VA guarantees.
The reason this mortgage has the best mortgage by far is because the rates are extremely favorable, underwriting on this mortgage make sense and very “pro story” in terms of their credit decisions and these loans are very flexible and allow for higher debt to income ratios.
Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.