Norman Mortgage News

VA Loans

VA loans are made by private lenders, and guaranteed by the U.S. Department of Veteran Affairs (VA) to qualifying veterans for the purchase of a home. The guarantee means that the lender is protected against loss if you fail to repay the loan. Most of the time, there is no required down payment on a VA loan, and the borrower often receives a lower interest rate than is available with other loans.

Other benefits of a VA loan include:

• Negotiable interest rate.
• Closing costs comparable, and potentially lower, than other financing types.
• No private mortgage insurance requirement.
• Right to prepay loan without penalties
• Mortgage can be taken over (or “assumed”) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

Although mortgage insurance isn't a requirement, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be financed in the loan amount, or paid in cash by the buyer or seller.

A VA loan can be used to buy or build a home, or improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/ caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.