How Well Do You Know Your VA Loan?

Veterans put their lives on the line to defend America's freedom, and as a token of respect for their service, the U.S. Department of Veterans Affairs offers special features for veterans who want to own a home. If you're a qualified veteran, the dream of owning a home can be achieved with ease through PRM's VA lending options. Here are some of the special features that come with VA loans.

Seller Concessions

In some cases, VA homebuyers may ask the seller to pay costs associated with the VA loan on the buyer's behalf. The VA permits seller concessions but requires that seller concessions do not exceed 4% of the loan amount. Seller Concessions Include:

• Prepaying taxes and insurance on the home
• Interest rate buydowns
• The buyer's VA funding fee
• Paying off judgements or credit balances on the buyer's behalf
• Gifts (i.e. a microwave or dishwasher)

Non-Allowable VA Fees

Non-allowable VA fees are expenses that VA buyers legally cannot pay. This makes the home buying process that much easier for qualified veterans. Non-Allowable Fees Include:

• Attorney fees
• Commissions or brokerage fees
• Escrow Fee/Settlement Fee/Closing Fee
• Closing Protection Letter
• Underwriting Fee/Processing Fee
• Lock-in Fee/Application Fee
• Appraisals requested by anyone but the buyer
• Fees for a flood zone determination by the lender or appraiser

This doesn't mean the home seller has to pay these fees. Any other party involved in the loan, such as the lender or a real estate agent, can cover these expenses. VA buyers can negotiate with the home seller to cover some or all of their closing costs. But that's not always a realistic option, so make sure to work with us in the early stages and factor in projected closing costs. We can help you create an offer which maximizes your budget and your chances of landing your dream home.

The VA's Minimum Property Requirements

The VA has a set of specific requirements for a home to qualify for a VA Loan. Minimum Property Requirements must be met in order to qualify for a VA loan. These home requirements help ensure that veterans and military families have a safe, structurally sound, and clean place to call home. Minimum Property Requirements Account For:

• Mechanical systems (heating & cooling)
• A reliable, drinkable water supply
• Domestic hot water
• A safe method of sewage disposal
• Roofs
• Rid of infestations
• Ventilation

Benefits of a VA Loan

The biggest benefit of a VA loan, for many borrowers, is that there is no need for a down payment. There aren't many loan types that don't require a down payment, and VA is one of them. There is no need to pay Private Mortgage Insurance (PMI) or arrange for a "piggyback" mortgage to cover your down payment. Another significant benefit of a VA home loan is the competitive interest rate. Many times with a lower down payment, the interest rate will increase. But VA loans don't have that problem! What Can You Do with a VA Loan? Specifically, a VA home loan can help veterans:

• Buy a home or residential condominium
• Build a home
• Repair, alter or improve a home
• Refinance an existing home loan
• Buy and improve a manufactured home lot
• Add energy-efficient improvements to a home
• Purchase and improve a home simultaneously with energy-efficient improvements
• Refinance an existing VA loan to reduce the interest rate

Do You Qualify? As a thank you to those who have served us, PRM is offering an exclusive promotion on Federal VA loans throughout the month of November.

Fill out the form below, or contact us to find out if you qualify now - there are no obligations and you'll find out if a VA loan is right for your dream home.

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