There are numerous advantages to having a VA mortgage. A VA mortgage loan can be guaranteed with no money down, in some cases up to $484,350 in 2019 - more if you live in a high-cost county. There is also no private mortgage insurance requirement with a VA guaranteed loan, which could offer you substantial savings on your monthly payment.
You can even use your VA Loan benefit to refinance an existing loan -- even if it is not a VA Loan. Be sure to ask for information about the interest rate reduction loan. This program adjusts an adjustable-rate mortgage to a fixed-rate loan, which is part of the Streamline Refinancing Program, which allows you to refinance at little or no expense to them.
We've scoured the Internet to find useful tips for our members to help prepare to take advantage of this exclusive benefit. The following is a collection of useful, concise tips regarding the Veterans Administration Home Loan.
Tip #1: Check Your Credit First
Did you know that over 70 percent of all credit reports in the United States contain errors? Your lender will be looking at your credit report and making important decisions based on the information that is contained within -- decisions that could make a big difference in the bottom-line.
Because lenders use complicated scoring formulas to determine how much you can borrow and at what rate it would be a good idea for you to check your credit report for any inaccuracies. Make sure you obtain a report that gives you information from all three major credit bureaus, as each may be different. You can obtain your credit report from each of the three bureaus for free, once per year.
What may seem minor to you might not to a lender. Contact the credit bureaus to correct any mistakes. This could result in substantial savings on the cost of your loan.
Tip #2: .Get Pre-Approved
Before you start the hunt for a house, the best thing you can do is to get pre-approved for your VA loan amount. The time you save quite literally will be your own. Once you have determined the loan amount you are approved for, you can start house hunting with confidence. In a tight housing market it will also give you a heads up with the seller, as other potential buyers may not have taken this important step.
Knowing in advance what you are able to afford offers a great deal of security. That kind of security will go a long way as you search for the best value for your money. Having a VA mortgage is an excellent benefit, but finding the right home is just as important. With pre-approval, you avoid wasting time with homes out of your price range or sellers who are unsure whether you are a serious buyer.
Tip #3: Choose Wisely - Fixed or Adjustable Rate Loan?
Chances are you will be looking for your VA guaranteed loan in the same places people go to get non-VA home loans or conventional loans. It always pays to shop around, which is why we match you with up to five lenders at Military.com. You can choose to get a fixed rate loan, which you'll negotiate with the lender, but don't discount the possibility of a VA adjustable rate mortgage (ARM).
The interest on an ARM may be adjusted one percent annually, and up to five percent over the duration of the loan period. So should you go with a fixed rate or adjustable? It really depends on the buyer: In a rising rate environment a fixed rate loan can offer some piece of mind but for those who might not be planning in staying in their home more than a few years, an ARM can offer significant savings now. The best advice is to do your homework, find the most competitive rate and don't take the first offer you get. That is a mistake often made by first time homebuyers who are excited getting into a house. The time you spend now can save you thousands of dollars in the years to come.
Next Step: Get pre-approvals and compare rates from up to five VA Loan lenders.