| The federal government offers many benefits to men | | | | lower than conventional loan rates. |
| and women who serve their country. One of those | | | | Another great benefit of the VA home loan program |
| benefits is the VA home loan program. The VA home | | | | involves the loan closing cost. While VA does not |
| loan can be used to purchase a new home or | | | | require the veteran to make a down-payment, there |
| refinance an existing one and is available to all | | | | are still loan closing cost as with any home loan |
| honorably discharged veterans and active duty military. | | | | program that the borrower incurs. Closing cost usually |
| The Department of Veterans Affairs (VA) does not | | | | average 3-5% of the loan amount. VA, however |
| actually lend out money but they guarantee or insure | | | | allows the seller to pay all of your loan closing cost up |
| the funds that are loaned to you by a VA approved | | | | to 6% of the loan amount. Compare this to a 3% |
| financial institution. You can go to any bank or | | | | maximum seller contribution for most conventional |
| mortgage company that participates in the VA loan | | | | loans. So with a VA home loan it is possible for a |
| program to apply. | | | | veteran to buy a home for up to $417,000 with no |
| The VA home loan offers several advantages over a | | | | down-payment and without having to pay any closing |
| conventional home loan. One ofthe most significant | | | | cost. Talk about using the power of other people's |
| benefits is that VA loans do not require a | | | | money to increase your net worth! |
| down-payment. As of January 1st, 2006 you can buy | | | | VA home loan participants also enjoy the luxury of not |
| a home for up to $417,000 with no down-payment. | | | | having to pay mortgage insurance. In contrast, with a |
| While there are some conventional no down-payment | | | | standard conventional loan you will have to pay |
| home loan programs on the market, you will have to | | | | mortgage insurance if you put down less than 20% as |
| pay a higher interest rate for the privilege. Not so with | | | | a down-payment. Mortgage insurance can add a |
| a VA loan. You pay the same market rate whether | | | | significant amount to your monthly payment so not |
| you are making a 10% down-payment or $0 | | | | having to pay this is really a plus to borrowers who |
| down-payment. In addition, you will find that in most | | | | use their VA loan benefit. |
| cases the VA interest rate is comparable with or even | | | | |