VA Mortgage Loans

Buying a home in Virginia, Maryland and Florida can be a big task, this applies to buying a home anywhere in general. When you buy a home you have many steps to follow. > Step 1: Decide Whether You’re Ready To Buy A Home. > Step 2: Calculate How Much You Can Afford On A House. > Step 3: Save For A Down Payment And Closing Costs. > Step 4: Decide What Type Of Mortgage Is Right For You. > Step 5: Get Preapproved For A Mortgage. As you can see, one of the steps is to figure out what kind of mortgage loan you will need to be looking into getting so you can have the home of your dream. One option is VA Mortgage Loan. Buying a home in Virginia can take time, most buyers can expect to spend around 6 months purchasing a home. It will usually take about a week to get your mortgage preapproval after you apply, and you’ll spend around 3 months looking at properties. So having patience is key to keeping the process as stress free as possible. In this article we will discuss the ins and outs of VA Loans and what to be ready for when dealing with one. Let’s begin!

As we discussed before there are many different types of loans you can look into when you are in the process of buying a home. Let’s begin with what a VA Mortgage Loan is, a VA loan is a mortgage offered through a U.S. Department of Veterans Affairs program. VA loans are available to active and veteran service personnel and their surviving spouses, and are backed by the federal government but issued through private lenders. A VA loan can make it easier to buy a home because it typically doesn’t require a down payment. You may be asking yourself, are VA loans better than conventional? VA loans typically have lower interest rates than conventional loans and require no down payment. They also come without mortgage insurance costs, which limit your buying power. When using a VA loan, the buyer, seller, and lender each pay different parts of the closing costs. The seller cannot pay more than 4% of the total home loan in closing costs. With that being said,  their portion of the closing costs includes the commissions for buyer and seller real estate agents. Below I will list what you can use a VA mortgage loan for:

VA Home Loans can be used to purchase:

• An existing home, or a condominium or townhouse in a VA-approved project.
• A multi-unit property (up to four-plex), provided the buyer occupies one of the units.
• A manufactured (mobile) home or a modular home.
• A new construction.

There are far more positives for a VA Mortgage loan than negatives. Most people ask “Do you have to pay back a VA Loan?”  Private banks, credit unions, and mortgage companies do that. The VA provides insurance to lenders. It’s officially called the VA guaranty. The VA assures the lender that it will be repaid if the Veteran can no longer make payments. A VA Loan is completely worth it in the long term, VA loans offer better terms and interest rates than most other home loans. 100% financing, typically, there is no down payment required for a VA loan, as long as the purchase sales price of the home does not exceed the appraised value of the home.  There is no penalty for paying off the loan early. They are easy to get most of the time, If you’re eligible, VA loans are fairly easy to qualify for, since there’s no down payment required, no minimum credit scores, and no maximum limit on how much you can borrow relative to income. If you ever need to switch the loan over for any reason that is fairly simple as well, You can take your existing VA loan and turn it into a conventional loan so that you can use the property for rental. Since VA loans allow you the option of buying a home for no money down, if you refinance to a conventional loan, it could add private mortgage insurance into your monthly mortgage payments. On average, a VA loan takes from 50 to 55 days to close – from signed contract to closing. This is only slightly longer than the average closing time on a conventional mortgage.

However there is one restriction with the VA Loans, you cannot purchase just property. Vacant land is a no go for VA financing. You can’t use a VA loan to purchase a plot of land, even if you plan to put a home on it one day. There would need to be a home in the immediate mix. VA Loans do have limits as well as far as how much you can receive, the standard VA loan limit in 2022 is $647,200 for most U.S. counties, increasing from $548,250 in 2021. VA loan limits also increased for high-cost counties, topping out at $970,800 for a single-family home. VA loan limits do not represent a cap or max loan amount. Credit Score is also a factor,  lenders will require minimum credit scores of 580 to 620 to qualify for a VA loan. Fortunately, though, alternatives exist. If a borrower has sufficient residual income, some lenders will even approve VA loans with credit scores as low as 500.

Here at MCS Mortgage Services we offer many different options as far as loans go. The VA guarantees a portion of the loan to reduce the risk of loss to the lender. The loans generally are only available for a primary residence. If you are in the market for a new home be sure to contact us at MCS Mortgage Services serving Maryland and Virginia, we look forward to helping you lock in your dream home!