Wendy brings us excellent information about VA loans with an good tool to educate both military and non military personel (for example sellers that are selling to a military buyer). Please take a moment to read what she teaches us.
The U.S. Department of Veterans Affairs (VA) guarantees mortgage loans made to active duty military, veterans, reservists and members of the National Guard. Lenders like to originate these loans because the VA will reimburse them a maximum 25 percent of the loan limit if they experience a loss following a foreclosure or short sale. The national loan limit is $417,000 although certain high-cost counties have higher limits. For example, Yorba Linda CA is located in affluent Orange County and has a maximum limit of $625,000; San Francisco has a whopping $1,000,000 limit.
All applicants must provide a Certificate of Eligibility that you can usually obtain online on the VA website. If it’s not available, you have to send a written request. You won’t be approved for the loan without it. Dishonorably discharged veterans won’t qualify for a loan.
VA loans are attractive to borrowers for a number of reasons. The primary benefit of a VA loan is the fact that these products allow 100 percent financing; the borrower isn’t required to make any down payment. Interest rates on these loans are competitive and set by the lenders and not by the VA. Unlike FHA and many conventional loans, there is no mortgage insurance payment added to your monthly mortgage. That saves you a considerable amount of money each month.
If a lender approves you for a VA loan, you will incur an extra charge at closing. This funding fee is a one-time closing cost; the 2012 charge was set at 2.15 percent of the loan amount. The VA adds this money to the pool of reserves used to fund the guaranty that refunds lenders who lose money on a VA transaction. While this fee may seem high to you, the VA guidelines limit the total amount of closing costs charged to you.
Only owner-occupied residences qualify for a VA loan, but that could include a duplex, triplex or fourplex if you live in one of the units. If you're interested in having tenants, this is a terrific strategy for owning property. The rental income pays your mortgage; repair expenses are deductible, and you sit back and watch property values appreciate. You are essentially living in your home for free.
Military personnel travel the world as they are posted from one tour of duty to another, and thousands of them who prefer the sunny weather and relaxed California lifestyle decide to retire in Orange County. If you’re one of these veterans interested in purchasing real estate, contact a Yorba Linda Realtor today and see what the good life has to offer.
Wendy RawleyRealtor ~ DRE #01898824Prudential California RealtyPhone/Fax (877) 462-9363
Mark Loewenberg PA
Keller Williams REALTOR®
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