Banks and other private mortgage companies make a special type of home loan a portion of which is guaranteed by the Veterans Administration (VA) to veterans of the US Armed Services. This guarantee protects the lender’s investment should the borrower default.
Contact the VA to Determine if You are Eligible for a Loan
There are various qualifications to be deemed eligible for this benefit by the VA. Wartime veterans who served at least 90 days and were not dishonorably discharged qualify. Peacetime service veterans need to have served at least 181 days if they served prior to Sept 7, 1980 or at least two years after that date and were honorably discharged. Those serving in the Reserves and National Guard for at least six years and are still serving or have been honorably discharged may also be eligible. Surviving spouses of eligible persons who died as the result of service or service-related injuries who have not remarried may also be eligible. (Contact your local VA office for other questions regarding eligibility.)
Get a Certificate of Eligibility from the VA before Applying for a Loan
In order to apply for a VA loan you must have a Certificate of Eligibility from the Veterans Administration. To get this, go the VA website and get: VA Form 26-1880. Fill it out and send it in or along with your DD Form 214 documenting your service, if you served after 1979. This certificate does not guarantee the bank will approve your credit application, you must still qualify financially. Some veterans will be able to get an Automatic Certificate of Eligibility (ACE) through their lender via the internet, if the VA has entered sufficient information about the veteran in their database.
Restrictions on VA Loans
A VA home loan must be used to finance your personal residence within the United States or its territories. They can also be applied to home refinances as well as certain types of home improvements.
There is a Funding Fee
A fee of two percent of the loan amount or 2.75 percent for reservists must be paid when you close your VA. This can be included in the loan. If you can make a down payment of at least five percent, this fee will be reduced.
Advantages of VA Loans
Typically, veterans can get 100% financing with no down payment required. VA loans are guaranteed so there is no Private Mortgage Insurance (PMI) required which can be a savings of over $50 per month. Also, there are no penalties if you prepay the loan. Competitive interest rates are available. Finally, loan qualification may be slightly easier than if you were applying for a conventional loan. Sellers may be required to pay all closing costs. Nearly every lender offering FHA loans also makes VA loans.
Disadvantages of VA Loans
Sellers may be hesitant to work with someone who is acquiring a VA loan as they used to take longer to process than traditional loans. However, getting a VA loan today takes only a little longer than a conventional loans. Sellers are often asked to pay a portion of closing costs, so be aware of that when negotiating the sales price of the home. The guaranteed maximum may make this not feasible in some markets.
Filed under Home Insurance by on Apr 26th, 2010. Comment. 
A home has to be protected from all possible dangers. The best way to do that is to protect your home through home insurance policy. A home insurance policy can protect one from several varied situations, including fire and theft. Also, contents and possessions can be insured, along with the structure of the building and other equipments. Home insurance can be an expensive affair; this can be taken care of by deploying the services of a specialist broker.
There are a few things to be taken into consideration before taking a home insurance policy. The homeowner has to take certain precautions to ensure he does not get a raw deal. For instance, if the home has undergone some renovation work, the value increases. The current policy may not necessarily do justice to the actual value of the home. The competition in the home insurance sector is tremendous nowadays. Every new day brings about a more feasible offer. To get the best (or somewhere close to it) home insurance deal, one can undertake research of the plethora of offers that are in the market.
Should there be certain changes in the locality you are, it may lead to the increase or reduction of the home insurance policy. Generally, a customer’s insurance company contacts him should there be anything of that nature. Still, it would be foolhardy to expect your insurance company to update you on better deals from competitor companies. If the place you live in has damage or theft claims in recent history, the company will charge more. Here, the true value of the company is important. Also, of significance is the credit report.
Also, one can take steps to bring down the policy. Improving the safety measures can qualify the insured for a discount. Taking two or more policies can be helpful as well. One good advice is to shop around for the best deals.
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Filed under Home Insurance by on Dec 29th, 2009. Comment.