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Is It Reasonable to Buy a Home with VA Loan .pdf


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Is It Reasonable to Buy a Home
with VA Loan?

San Diego VA Loan
A loan backed by the Department of Veterans Affairs, issued only to those who have
served or are presently serving in the U.S. military and their respective families, is referred
to as a VA loan. Lending institutions such as banks, mortgage companies and private
lenders must be qualified before being able to issue such a loan.
When choosing San Diego VA loan, it is important to know that there is more than just one
type of loan applicable under different circumstances. There are three categories:
purchase loans, VA streamline refinance loans, and cash-out refinance loans. The
qualifying process can be extremely difficult for individuals with a history of bankruptcy or
foreclosure, however, this is not true for a VA loan. With the benefit of not having to pay
the down payment, this benefit proves to be one of the biggest given to veterans.
An additional noteworthy point of a VA loan is that there is no fixed, maximum amount.
The veteran can finance as much as the lender will approve. The availability of negotiable
and competitive interest rates on this loan make it one of the most flexible and attractive
options. With the U.S. government extending financial guarantees to VA approved lenders,
they can remain assured about their money and feel confident in offering financing to
qualified veterans and their families.
While other loans involve additional financial issues such as mortgage insurance, which
requires borrowers to pay a significant amount as monthly installments or an annual fee

spread over a long term, this insurance is not required for a VA loan. Another benefit is the
absence of a prepayment penalty, resulting in reduced or zero out of pocket costs for the
borrowers. Another helpful option is that those wishing to refinance can do so by using an
additional VA loan.
There has been a significant boom in this market over the last couple of years. Previously,
veterans and their families had to struggle to qualify for entitlement to conventional or FHA
home financing. In this era of real estate market crashes, VA loans are enabling approved
borrowers to achieve home ownership in a location of their choosing.
There are, however, some potential shortcomings with VA loans. One is a mandatory
funding fee, something people must pay with a conventional loan. Moreover, a VA loan is
approved for a primary residence only and cannot be utilized for a second residence or
any other property for investment. Also, due to the various ongoing misconceptions about
VA loans, some home sellers are not always open to VA borrowers.
Irrespective of these issues, VA loans are a great option. One that helps vets and their
families make their dream of home ownership possible.


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