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VA Home Loan Program Or FHA Home Loan Program – Which is the Best For You?

The United States government provides many benefits to the members that are now serving or have serve in the past in the US military. Active and former members of the United States military can take advantages of benefits ranging from education incentives to compensation for disability occurred while in the military to even life insurance programs. One of the most used and most important is the Veteran Home Loan Program that provides assistance in financing a home loan.

There are currently over 23 millions living veterans and just little less than 10% of these veterans have taking advantage of this great benefit. But there is also another government backed home mortgage loan that veterans may want to consider also. This government backed loan is the FHA Home Loan Program.

So if you are an active member of the military, a veteran, or even a surviving or current spouse of a veteran you may want to compare the advantages and disadvantages of both the VA Home Loan Program and the FHA Home Loan Program.

You need to be fully informed before you buy a home because it is a huge decision and making the wrong decision can cost you thousands of dollars in the future.

VA Home Loan Program VS FHA Home Loan Program

VA home mortgage loans are similar to many conventional home mortgage loans but they do have many great benefits that are not found in conventional loans such as: you do not need a down payment, your credit scores can be lower than what is required for conventional loans, and you can “rolled” the closing and loan fees back into the mortgage thus making it a 100% financing loan.

The FHA Home Mortgage Loan Program is the most popular of mortgage loan programs for non-veterans and is growing in popularity because of the tight mortgage market today.

They have some of the same advantages of the VA home mortgage loans such as: they are easier to refinance, more lenient on the credit scores to qualify, and certainly lower down payment than conventional loans. The FHA home mortgage loan down payment is currently 3.5 of the purchase price of the home.

VA Home Mortgage Loan Eligibility Requirements

A veteran will have to get a Certificate of Eligibility that is issued to by the military to qualified veterans. The Certificate of Eligibility will also include the entitlement amount, which is the portion of the mortgage loan that the VA will guarantee. You can get the Certificate of Eligibility from the VA or you can have your mortgage lender get it for you on the Internet.

One big difference from a VA mortgage loan and a FHA mortgage loan is almost anyone can get a FHA mortgage loan, only people that are or have been in the military can be a VA mortgage loan.

There are no income limits for FHA loans, but there are limits on how much a person can borrow and it varies from each county in the country. You can find out from your mortgage lender what the limit is in your area.

VA home mortgage loans do have limits on how much you can borrow but the limits can currently go up to $729,000 in some parts of the country.

Another difference from FHA loans and VA loans is VA does not require a mortgage insurance premium called a PMI. FHA loans do require mortgage insurance (MIP). By getting a VA home mortgage loan you will save this expense which can be quite costly over the years.

VA home loan makes sense if you are a qualifying member or veteran of the military and they will allow you to take advantage of today’s very low interest rate plus you can buy a home with 100% financing.

If you don’t want to tackle the slight hassle of dealing with the VA or you do not have available VA entitlement then a FHA home loan will make the most sense.

Whether you choose the Veteran Home Loan Program or the FHA Home Loan Program you will need to work with an approved mortgage lender who will help you through the mortgage and closing process.

Owning a home is still the American dream and the government has two great programs to help you to achieve that dream, so get more information on the Veteran Home Loan Program and the FHA Home Loan Program and make that American dream happen for you!

Don’t Get Trapped With Low Home Loan Rates

If you are planning to buy a new home, you have to know about home loan rates. You are going to pay for it in a very long time so you have to make sure that you get a home loan rate that will best fit your budget.

There are a few companies who offer low home loan rates. For sure you will be tempted to grab the offer right away failing to get into the finer details that makes up the deal. Before making an instant decision that could possibly trap you into paying more than what you bargained for, here is some useful information that you could use to make sure that you can truly afford the house you are buying for:

The first step to determine if you can afford to have a new home is not by knowing whether or not home loan rates are at their lowest points. Consider first your income and liabilities. Compute for your monthly income and determine how much your total liabilities for a month are. Always include in the computation your total monthly spending that do not always reflect on writing or billing statements such as your budget for pool cleaning, gardening services, even your babysitter’s payments. If you have more than enough left both for savings and for your emergency fund, then you must be ready for a bigger project like purchasing a new house.

It is also important to determine your debt to income ratio or DTI ratio in order to know whether you have the capability to apply for a home loan. Even if you get to avail of a low home loan rate, you must be comfortable of how much you are going to pay for it every month. DTI ratio computation will give you an idea how much you should budget on your monthly housing payment, monthly liabilities, and savings.

Do a thorough search for the best home loan rate there is. Do not get satisfied with only one offer as there are many other lenders that you can go to. Try searching online for faster results. When you do find the rate that you are most comfortable to be paid for, proceed to make an appointment with the lender to know more about its details. Do not forget to read the fine print of the deal as it generally contains the most important information that should not be missed.

When shopping for a new home, having the best rate in your hands is not always the key to getting your dream home. Home loans are offered not solely for the purpose of helping people get the house that they like. They are there because they are someone else’s business. If you are just going to grab an offer right away just because of the low rate that it got then you are not ready to take on this responsibility. Considering your capabilities to pay for it should be your top priority. You have to know whether you can pay for the loan or risk losing the house because of an unpaid mortgage.

Applying For A Home Loan – What Do You Need

The Basic Needs When Applying For A Home Loan
Congratulations! Now that you have found the perfect home, all that’s left is getting the perfect mortgage. In order to do that, you will have to know what your lender needs from you in order to get your loan application approved.

Property Description
When applying for a home loan, you will need to provide the lender with detailed information regarding the property that you intend to purchase, including a physical address, what type of loan you are requesting and how you obtained the funds to be used as a deposit.

Your Personal Information
All persons named on a home loan must be able to provide requested personal information including but not limited to names, dates of birth, current address, former address (typically if within the last two years), marital status, current and former employment information, telephone numbers and any dependants you may be responsible for.

Most lenders require tax returns for at least the two years preceding the loan application, along with current payslips or, if self-employed, a year-to-date profit/loss statement. This may be required for more than the previous years income.

Current Mortgage Expenses
An important part of every home loan application is affordability. Your lender will need to know the percentage of your income that will be available to pay for a new home. If you have a current mortgage, be ready to provide a detailed list of expenses that you pay each month in relation to the property. This includes a mortgage payment, body corporate fees, local government taxes (rates), mortgage insurance, homeowner’s association fees, utilities, etc. If you plan to sell the home, advise your lender know so that they are aware you are simply replacing one debt with another.

Legal Yes Or No’s
Almost every loan application asks both the borrower and co-borrower (if applicable) to answer a few simple yes and no questions on the application. Questions pertaining to outstanding judgments, bankruptcy filings, foreclosures, lawsuits, alimony, child support and citizenship status are standard and should be expected when applying for a home loan.

Statement Of Assets & Liabilities
When applying for a home loan, both the borrower and co-borrower will be required to disclose all of their current assets and liabilities. An asset is property, either real or personal, that is owned and is of value. A liability, on the other hand, is a financial obligation for which one is liable. A loan application will request information relating to assets and their current market value, including automobiles, real estate, stocks, bonds, life insurance (cash value), business net worth, personal property, etc. If any amount of money is owed on these properties, the lender will request information relating to the unpaid balance in order to determine.

Disclaimer: Information provided in this article is intended to be general in nature only. This does not constitute specific financial advice to individuals, groups, business or corporations.