The Pros and Cons of VA Loans
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Transcript of The Pros and Cons of VA Loans
![Page 1: The Pros and Cons of VA Loans](https://reader033.fdocuments.in/reader033/viewer/2022042817/55a73b091a28abd5258b460d/html5/thumbnails/1.jpg)
The Pros and Cons
of
VA Loans
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The Veteran’s
Administration guaranteed
home loan program has
allowed millions of
veterans and active duty
service members an
affordable way to own their
own homes.
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The program does not
provide home loans for
veterans. Instead, it
guarantees loans given by
private lenders.
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A look at the pros and cons
of the program can help
homebuyers determine if a
VA guaranteed loan is right
for them.
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Pros of VA Home Loans
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The VA home loan program
is popular because it offers
homebuyers a number
of advantages:
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· Little or no down
payment is required –
Homebuyers can purchase
a home sooner because
they do not have to save for
the large down payment
required by lenders offering
conventional loans.
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· Competitive interest
rates - Because the risk for
repayment of the loan is
covered by the federal
government, lenders can
offer lower interest rates.
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· The purchase price of
the home is assured – A VA
appraisal ensures that the
home is worth the value of
the loan.
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· Closing costs are
limited – The VA program
will pay customary closing
cost items, but not
additional costs.
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· No prepayment
penalty – Homeowners who
then sell their property do
not have to pay a penalty
for paying off the loan
earlier than its term.
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· VA loans are
assumable – The
homeowners can offer the
favorable mortgage terms
to a subsequent buyer.
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· Forbearance for
financial difficulties – If the
homeowner has a financial
setback and cannot make
payments, special terms
can be negotiated for them.
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· Warranty for VA
approved construction –
The VA will assist in
enforcing the builder’s
warranty for justifiable
construction complaints.
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Cons of VA
Home Loans
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A home loan through the
VA program also has a
number of disadvantages
that homebuyers should
take into account:
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· VA home loans are for
the purchase of primary
residences - These loans
cannot be used for
purchasing investment
property or second homes.
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· You must pay a VA
loan funding fee – The VA
imposes a fee on these
loans to fund the program.
The fee can be rolled into
the loan amount.
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Veterans who have
service-related disabilities
are exempt from paying
this fee. The funding fee
increases each time you
use the VA home loan
funding program.
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· Sellers may not agree
to a sale with VA loan – A
number of misconceptions
regarding VA home loans
have contributed to seller
reluctance to enter the
application process.
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However, sellers may be
required to pay some of
the closing costs, and this
expense may put off
some sellers.
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· Loan limits and
overlays may apply – The
VA home loan program
does not impose limits on
home loans. However,
private lenders may have
additional requirements,
called overlays, in regard
to loan amounts.
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These requirements help
to ensure that the lender
maintains its favorable
record with the VA.
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· VA loans do not
guarantee construction
defects – Approval of the
loan neither guarantees that
the property is free of
defects, nor can it compel
the builder to correct any
problems with construction.
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However, it can suspend the
builder from the VA program.
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· The VA program does
not provide for legal
services, if necessary –
Any legal action against
the builder or previous
owner is the responsibility
of the buyer.
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Our VA Loan Specialist
helps veterans obtain the
loans they are entitled to.
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He served in the United
States Marine Corps, and
now devotes himself to the
Veteran home buyer in the
Phoenix area, fulfilling a
passion of his while at the
same time helping others
achieve home ownership.
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Be a proud homeowner today.
For more details call 480-
351-5904
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VA Loans for Vets
7702 E. Doubletree Ranch Road,
Suite 220
Scottsdale, AZ 85258
Phone: (480) 351-5904
Email: [email protected]