VA loan guaranty characteristics.
The VA program has a number
of features that are attractive to borrowers who qualify:
1. A VA loan may not
have prepayment penalties.
2. A VA loan may be as
seen by anyone, the new buyer does not have to be a veteran.
3. No mortgage
insurance is required.
4. Funding these may
be financed.
5. Builder warranty is
required on new homes.
6. Closing cost may be
paid by seller.
While no mortgage insurance is required, the VA charges a funding
fee set at 2% on non-down payment loans. For second time users with
eligibility, the fee is 3%.
With a down payment of 5%, the fee for both first and second time
users is 1.5%. For a 10% down
payment, the fee drops to 1.25%.
The fee may be finance in the loan.
Closing costs are not permitted to be finance in the
loan.
However, the VA sets maximum fees for these items. These fees are changed from time
to time by the VA. Current
closing cost items include:
1. A maximum 1%
origination fee.
2. Appraisal fee are
set by regional VA offices.
3. Credit report fee
may not exceed the costs charged to the lender.
4. The fact that many
paid for hazard and flood insurance, if required.
5. The veteran may pay
for title insurance.
6. The veteran must
pay to the a funding fee.
7. The return many pay
for recording fees.
8. The term is
responsible for paraded interest and property
taxes.
