The Pros and Cons

of

VA Loans

The Veteran’s

Administration guaranteed

home loan program has

allowed millions of

veterans and active duty

service members an

affordable way to own their

own homes.

The program does not

provide home loans for

veterans. Instead, it

guarantees loans given by

private lenders.

A look at the pros and cons

of the program can help

homebuyers determine if a

VA guaranteed loan is right

for them.

Pros of VA Home Loans

The VA home loan program

is popular because it offers

homebuyers a number

of advantages:

· Little or no down

payment is required –

Homebuyers can purchase

a home sooner because

they do not have to save for

the large down payment

required by lenders offering

conventional loans.

· Competitive interest

rates - Because the risk for

repayment of the loan is

covered by the federal

government, lenders can

offer lower interest rates.

· The purchase price of

the home is assured – A VA

appraisal ensures that the

home is worth the value of

the loan.

· Closing costs are

limited – The VA program

will pay customary closing

cost items, but not

additional costs.

· No prepayment

penalty – Homeowners who

then sell their property do

not have to pay a penalty

for paying off the loan

earlier than its term.

· VA loans are

assumable – The

homeowners can offer the

favorable mortgage terms

to a subsequent buyer.

· Forbearance for

financial difficulties – If the

homeowner has a financial

setback and cannot make

payments, special terms

can be negotiated for them.

· Warranty for VA

approved construction –

The VA will assist in

enforcing the builder’s

warranty for justifiable

construction complaints.

Cons of VA

Home Loans

A home loan through the

VA program also has a

number of disadvantages

that homebuyers should

take into account:

· VA home loans are for

the purchase of primary

residences - These loans

cannot be used for

purchasing investment

property or second homes.

· You must pay a VA

loan funding fee – The VA

imposes a fee on these

loans to fund the program.

The fee can be rolled into

the loan amount.

Veterans who have

service-related disabilities

are exempt from paying

this fee. The funding fee

increases each time you

use the VA home loan

funding program.

· Sellers may not agree

to a sale with VA loan – A

number of misconceptions

regarding VA home loans

have contributed to seller

reluctance to enter the

application process.

However, sellers may be

required to pay some of

the closing costs, and this

expense may put off

some sellers.

· Loan limits and

overlays may apply – The

VA home loan program

does not impose limits on

home loans. However,

private lenders may have

additional requirements,

called overlays, in regard

to loan amounts.

These requirements help

to ensure that the lender

maintains its favorable

record with the VA.

· VA loans do not

guarantee construction

defects – Approval of the

loan neither guarantees that

the property is free of

defects, nor can it compel

the builder to correct any

problems with construction.

However, it can suspend the

builder from the VA program.

· The VA program does

not provide for legal

services, if necessary –

Any legal action against

the builder or previous

owner is the responsibility

of the buyer.

Our VA Loan Specialist

helps veterans obtain the

loans they are entitled to.

He served in the United

States Marine Corps, and

now devotes himself to the

Veteran home buyer in the

Phoenix area, fulfilling a

passion of his while at the

same time helping others

achieve home ownership.

Be a proud homeowner today.

For more details call 480-

351-5904

Visit the site at:

www.valoansforvets.com

VA Loans for Vets

7702 E. Doubletree Ranch Road,

Suite 220

Scottsdale, AZ 85258

Phone: (480) 351-5904

Email: jimmyv@fcbmtg.com