Is It True That Closing Costs And Down Payments Are Zero For VA Loans

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• IS IT TRUE THAT CLOSING COSTS AND DOWN PAYMENTS

ARE ZERO FOR VA LOANS?
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• In 1944, the U.S. Government created the VA Home
  Loan Program in accordance with the GI Bill. The
  programs concept is to enable veterans of the
  United States military to establish homeownership
  upon discharge from the service.

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• In 2015, there were 427 billion worth of
  outstanding loans, cites Inside Mortgage Finance.
  However, many veterans today do not understand
  how the program works and some are not even aware
  that they qualify for home loans through the VA.

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• Therefore, it is very important to outline some
  of the basic guidelines and requirements for VA
  home loans.

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The Financing Question
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• Many veterans who are unaware of how home loans
  through the VA work believe the financing comes
  directly from the VA.

This is not the case.
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• The Department of Veterans Affairs only
  guarantees the loan, and mortgage finance
  companies provide the actual dollars for the loan.

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A home loan through the VA is similar to an
insurance policy.
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• If a veteran goes into default status on a
  mortgage, the VA guarantees it will pay a certain
  amount of the loan.

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Down Payment Requirements
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• Most mortgage lenders require potential borrowers
  to pay money upfront before they consider
  financing home purchases.

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• This tidy little sum a borrower pays upfront
  provides lenders with a safety net in the event
  the loan goes into default. However, a loan
  through the VA does not require a down payment.

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• Many veterans question how a no down payment
  requirement is possible or if it is true. The
  answer is simple.

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• Since the VA guarantees to pay a significant
  portion of the loan in the event of default,
  there is no need for an additional down payment.

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• So, yes, it is true that the VA does NOT require
  a down payment for qualified veterans.

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No Closing Costs?
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• Unfortunately, veterans are required to pay some
  closing costs before finalizing the loan.

However, the amount of money to be paid is
limited by the VA.
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• Following is a list of closing costs that the VA
  does not allow a veteran to pay for

• Lender Document Fees.

• Recording Fee Above 17.

• Notary Fees.

• Transaction Fees.

• Mortgage Broker Fees.

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• The fees listed are common among traditional
  mortgage financing and often cost the borrower
  thousands of dollars at the closing table.

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• Veterans do pay what is known as a funding fee on
  no down payment loans.

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• The fee is 2.15 percent of the loan amount for
  first-time use and 3.3 percent for veterans using
  the VA loan program for the second time.

The VA does allow veterans to roll the fee into
the principal balance of the loan.
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How to Apply for a VA Home Loan
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• Veterans who wish to purchase a home using the VA
  Home Loan Program must first obtain a Certificate
  of Eligibility, known as a COE, from the VA.

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• Veterans with a COE in hand can then shop around
  for a mortgage just like any other person.

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• The VA does outline specific service requirements
  before issuing a COE.

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• The VA also requires veterans to have sufficient
  income, and the home must be used as a primary
  residence.

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• The VA does not allow veterans to use the loans
  for second homes or investment properties.

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Mortgage Originator Jimmy Vercellino,
specializing in VA loans, helps veterans use
their VA loan benefit to their greatest
advantage.
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Learn more about the types of loans for veterans
here https//www.valoansforvets.com/types-of-loan
s/ For more details call 480-351-5904.
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Jimmy Vercellino, NMLS 184169 Mortgage Originator
Specializing in VA Loans
The views expressed here are those of the
individual author and do not necessarily
represent those of First Choice Bank (NMLS
177877) and First Choice Loan Services Inc. (NMLS
210764), 7702 E. Doubletree Ranch Road,
Scottsdale AZ 85258. Equal Housing Lender.
www.fcloans.com/disclaimer/  www.fcbhomeloans.com/
privacy
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VA Loans for Vets 7702 E. Doubletree Ranch Road,
Suite 220 Scottsdale, AZ 85258 Phone (480)
351-5904 Email jimmyv_at_fcbmtg.com