Embed Size (px)
Citation preview
The Pros and Cons
of
VA Loans
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.
The program does not
provide home loans for
veterans. Instead, it
guarantees loans given by
private lenders.
A look at the pros and cons
of the program can help
homebuyers determine if a
VA guaranteed loan is right
for them.
Pros of VA Home Loans
The VA home loan program
is popular because it offers
homebuyers a number
of advantages:
· 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.
· Competitive interest
rates - Because the risk for
repayment of the loan is
covered by the federal
government, lenders can
offer lower interest rates.
· The purchase price of
the home is assured – A VA
appraisal ensures that the
home is worth the value of
the loan.
· Closing costs are
limited – The VA program
will pay customary closing
cost items, but not
additional costs.
· 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.
· VA loans are
assumable – The
homeowners can offer the
favorable mortgage terms
to a subsequent buyer.
· Forbearance for
financial difficulties – If the
homeowner has a financial
setback and cannot make
payments, special terms
can be negotiated for them.
· Warranty for VA
approved construction –
The VA will assist in
enforcing the builder’s
warranty for justifiable
construction complaints.
Cons of VA
Home Loans
A home loan through the
VA program also has a
number of disadvantages
that homebuyers should
take into account:
· VA home loans are for
the purchase of primary
residences - These loans
cannot be used for
purchasing investment
property or second homes.
· 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.
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.
· 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.
However, sellers may be
required to pay some of
the closing costs, and this
expense may put off
some sellers.
· 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.
These requirements help
to ensure that the lender
maintains its favorable
record with the VA.
· 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.
However, it can suspend the
builder from the VA program.
· 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.
Our VA Loan Specialist
helps veterans obtain the
loans they are entitled to.
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.
Be a proud homeowner today.
For more details call 480-
351-5904
VA Loans for Vets
7702 E. Doubletree Ranch Road,
Suite 220
Scottsdale, AZ 85258
Phone: (480) 351-5904
Email: [email protected]
