| VA Loans | | | | ranging from 0-3.3% of the value of the loan. One is |
| VA is an abbreviation for Veterans Administration. | | | | also allowed to take a loan to finance this funding fee |
| Veterans is a term used in the United States for | | | | as well. There are a host of advantages that accrue |
| citizens who have served in the United States Armed | | | | to US citizens who avail VA loans. There is no |
| Forces. VA Loans is a mortgage loan program under | | | | prepayment penalty against these loans. One does not |
| the ownership of the United States Department of | | | | have to undertake a private mortgage insurance |
| Veterans Affairs and managed by Veterans | | | | against this loan. The loan is at rates less than the rate |
| Administration. The objective of this department is to | | | | at which mortgage loans are available to non-veterans. |
| help the US veterans and their families obtain a loan | | | | As long as it is proved beyond doubt that one is a US |
| for the purpose of buying a home. The loans however | | | | veteran, other qualification and eligibility criteria are |
| are arranged by banks or financial institutions and the | | | | easier compared to conventional loans. |
| Veterans Administration itself does not provide the | | | | In order to apply for a VA loan, the most important |
| loans. The objectives of setting up the Veterans | | | | requisite is the possession of a veteran's certificate of |
| Administration are three fold:o Ensure all the veterans | | | | eligibility and the VA-assigned appraisal. The |
| have complete papers to apply for VA loans. | | | | possession of the certificate of eligibility in itself does |
| Determine all those people who are qualified to obtain | | | | not imply that one would be sanctioned a loan, it |
| a loan under this category. In order to qualify for a VA | | | | merely means that one is eligible to apply for a VA |
| loan, the borrower shall have to provide the lender with | | | | loan. Besides these 2 documents, the application |
| a formal proof of his working with the US armed | | | | process is very similar to other mortgage loans Even |
| forces.o Formalize the term and conditions of the | | | | the loan processing procedure would be as rigorous |
| mortgage offer ando Ensure there are no defaults | | | | as a conventional mortgage loan. |
| against VA loans. The VA loans are guaranteed by | | | | The other notable aspect of VA loans is that it is |
| the United States government and hence have nil | | | | expected that the VA loan borrower would take the |
| probability of default. This guarantee is off course | | | | possession of the property within 60 days of the |
| subject to certain safeguards for the government | | | | closure of the loan. Hence it is not legal to rent out the |
| such as evaluating the credit rating of the veteran. This | | | | property purchased by way of VA loan arrangement. |
| essentially means establishing that the veteran has the | | | | While availing the VA loans, one has to certify that the |
| necessary credit rating and financial strength to | | | | property is being for self consumption and is for |
| support for payment of the mortgage. | | | | personal use only. |
| The Veterans Administration charges a funding fee | | | | |