Military personnel looking for financing in today’s mortgage
environment can take advantage of the VA loan program, which has been available
for more than six decades to help members of the military own their own homes.
The program, established in 1944 as part of the Servicemen’s Readjustment Act,
is available for any individual who has served in active duty in any branch of
the U.S. military for a minimum of 90 days.
“The beauty of
this loan is that it allows financing without requiring a down payment,” said
Eric Kandell, founder of lowvarates.com. “It also doesn’t allow the mortgage
lender to charge the veteran private mortgage insurance.” A VA loan requires the borrower to pay a
one-time funding fee on their purchase, which can be paid up-front or financed
into the total cost of the loan. The funding fee for regular military members
is 2.15% of the loan. Reservists pay a fee of 2.40%.
Non-active duty
personnel, such as individuals in the Army Reserves or National Guard, may
apply for a VA-backed mortgage provided they have completed six years of
service. Spouses of deceased or missing military members are also eligible if
they have not remarried. Those who were dishonorably discharged from any
military branch are not eligible.
The Department of Veteran’s Affairs states that roughly 25 million
people are eligible for a VA loan yet only 10%-15% of those have
taken advantage of it when buying or refinancing. For many years, leading up to
the mortgage crisis there were many conventional mortgage products that were
easier or more economical to the veteran than the VA loan. “In the wild, wild
west of mortgage lending from the early 2000s to 2008, 100% financing was
common,” Thorne said. “So why pay the VA funding fee just to have 100 percent
financing?
Today, veterans remain in the dark about VA loan
benefits or that the program even exists. Thankfully, Prudential California Realty has an in-house Lening company to
assist potential buyers with finding the right type of financing. For more information about homes in Ventura
County or to contact our agents or lending company, please visit
www.prucalhomes.com
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