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The VA loan: Better than FHA and conventional loans?

There is a “right program” for every mortgage borrower, but for many, the VA loan stands apart for its combination of low rates, aggressive underwriting, and secondary benefits.

Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans and certain other groups become homeowners at an affordable cost.

The VA loan asks for no down payment, requires no mortgage insurance, allows flexible guidelines for qualification among its many other advantages.

Here’s an overview of the 10 biggest benefits of a VA home loan.

1. No down payment on a VA loan

Most home loan programs require you to make at least a small down payment to buy a home. The VA home loan is an exception.

Rather than paying 5, 10, 20 percent or more of the home’s purchase price upfront in cash, with a VA loan you can finance up to 100 percent of the purchase price. The VA loan is a true no-money-down opportunity.

2. No mortgage insurance for VA loans

Typically, lenders require you to pay for mortgage insurance if you make a down payment that’s less than 20 percent. This insurance, which is known as private mortgage insurance (PMI) for a conventional loan and a mortgage insurance premium (MIP) for an FHA loan, protects the lender in the event that you default on your loan.

VA loans require neither a down payment nor mortgage insurance. That makes this a VA-backed mortgage very affordable upfront and over time.

3. VA loans have a government guarantee

There’s a reason why the VA loan comes with such favorable terms. The federal government guarantees that a portion of the loan will be repaid to the lender even if you’re unable to make monthly payments for whatever reason.

This guarantee encourages and enables lenders to offer VA loans with exceptionally attractive terms to borrowers that want them.

4. Your ability to shop and compare VA loans

VA loans are neither originated nor funded by the VA. Furthermore, mortgage rates for VA loans aren’t set by the VA itself. Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions and mortgage lenders — each of which sets its own VA loan rates and fees.

This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget.

5. VA loans don’t allow a prepayment penalty

A VA loan won’t restrict your right to sell your home if you decide you no longer want to own it. There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home.

Furthermore, there are no restrictions regarding a refinance of your VA loan.

You can refinance your existing VA loan into another VA loan via the agency’s Interest Rate Reduction Refinance Loan (IRRRL) program or switch into a non-VA loan at any time.

6. They come in many varieties

A VA loan can have a fixed rate or an adjustable rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other types of properties.

Or, it can be used to refinance your existing mortgage, make repairs or improvements to your home, or make your home more energy efficient. The choices are yours. A VA-approved lender can help you decide.

7. It’s easier to qualify for VA loans

Like all mortgage types, VA loans require specific documentation, an acceptable credit history and sufficient income to make your monthly payments. But, as compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guaranty.

The Department of Veterans Affairs genuinely wants to make it easier for you to buy a home or refinance.

8. VA loan closing costs are lower

The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans. Money saved can be used for furniture, moving costs, home improvements or anything else.

9. The VA offers funding fee flexibility

VA loans require a “funding fee”, an upfront cost based on your loan amount, your type of eligible service, your down payment size plus other factors. Funding fees don’t need to be paid as cash, though. The VA allows it to be financed with the loan, so nothing is due at closing.

And, not all VA borrowers will pay it. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability.

10. VA loans are assumable

Most VA loans are “assumable,” which means you can transfer your VA loan to a future home buyer if that person is also VA-eligible.

Assumable loans can be a huge benefit when you sell your home — especially in a rising mortgage rate environment. If your home loan has today’s low rate and market rates rise in the future, the assumption features of your VA become even more valuable.

HOW TO BUY A HOUSE: CLICK HERE | INTERESTED IN SELLING: CLICK HERE

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Are you interested in buying a condo? If so, you’ve come to the right place. Buying a condo is somewhat like buying a single-family house, but there are some differences you should be aware of. There are many pros and some cons to buying a condo and it’s important to be fully aware of every angle before making a decision. So, if you or someone you know is looking to make a condo their new home, read on for much more information.

What is a Condo?

In simplistic terms, think of a condo as an apartment you own. In those instances, residents often share walls with their next-door neighbors. Condos have common areas like many apartment complexes, but with a condo, the common areas are jointly owned by other condo residents.

It should be noted that there are some condos that are detached units.

Are Condos Worth Buying?

Condos offer many buyers an opportunity to live in a location they might not otherwise be able to without sacrificing convenience or their preferred lifestyle in favor of homeownership. Owning a condo can be a viable alternative to renting an apartment, especially considering that as a condo owner, you can build equity and often take advantage of tax deductions on the mortgage interest.

Another unique feature of condo living is that most condos will have a governing board that oversees how the condominium community operates and is maintained. These associations manage the complex and handle any rules or guidelines for the community. They are also responsible for the upkeep of the common areas that are owned by all the residents of the building.

Pros of Buying a Condo

Equity

If you are partial to apartment living due to the amenities and the sense of community you can build, but you are also interested in building for your financial future, condo life may be the right choice for you. When you buy a condo, you can build equity. Home equity is the financial portion of the home the owner truly owns. Equity can increase over time as you pay down your mortgage. Equity can also increase if the property value rises. Then, if you decide to sell the condo, you can use the equity you’ve built to help you buy your new home.

2. Affordability

Condos tend to be less expensive than their single-family house counterparts, and they can provide homeownership opportunities for more buyers.

3. Location

Many condos are built in popular, high-demand areas and downtowns, so if you want to be in the heart of a city or within walking distance to many different amenities, a condo might be a good option.

4. Security

Many condos offer security features such as a call box, doorman, or guard service. Living among a group of neighbors also provides a sense of security when you are away from your condo.

5. Improvements

Unlike an apartment, if you own a condo, it’s yours. You can make home improvements you like to your unit. Want to redo the kitchen or a bathroom? You can do it. Want to paint a bedroom? You can do it. You aren’t beholden to whether the apartment management company wants to make improvements or not.

6. Maintenance

If you’re not inclined to do yard work or handy with tools, a condo may be for you. Many condo complexes hire professionals to maintain the exterior and the common areas.

7. Amenities

As a condo owner, you are co-owner of any common areas that the condo building has to offer. Many buildings offer tennis courts, swimming pools, a gym, a theater room, and other amenities that you might not be able to afford on your own.

Possible Cons

No Land Ownership

When you buy a condo, you won’t own the land beneath it. Instead, you share an interest in it with the other condominium residents. When you buy a house, you are also buying the land the house sits on. Depending on your preference, this might mean spending less over time on home maintenance.

2. Fees

The common areas of a condo building are certainly nice, but it costs money to maintain them. As a condominium resident, you will likely be required to pay a monthly fee that goes towards the maintenance and repair of the common areas. There may also be an additional fee tacked on for any larger repairs and renovations to those areas as well, but you will also get to enjoy these amenity upgrades.

3. Community Association Rules

Since you’ll be living in a community with a community board or association that helps to govern it, you will have to abide by the rules of the condo. Rules may include whether you can have pets, what types of pets you may have, how and when the shared facilities may be used, and rules about visitors or guests among others. You may also elect to participate in your community board or association.

4. Parking

Depending on the location, a condo may come with limited (if any) parking options. Some condos only allow one assigned parking space per unit, which could be an issue if your family has more than one car.

5. Storage

Given that condos are typically smaller than houses, you will likely have much less space for storing items in a condo compared to a house. Some condo units come with a designated storage space, but those spaces may be small and not able to hold larger items.

Condo Loans

When it comes to buying a condo, you should be aware that there are some differences between condos and single-family houses when it comes to the mortgage process.

Compared to a loan for a single-family house, a condo loan may have a few additional considerations. If you’re ready to buy a condo, be sure to work with a dedicated team for condo approvals.