VA Mortgage/Loan

Over 29 million veterans and service personnel are eligible to receive Veterans Administration (VA) loans. Essentially a mortgage loan, a VA loan/mortgage is guaranteed by the Veterans Administration and is issued by qualified lenders. The loan program was designed to offer long-term financing to American veterans or their surviving spouses (so long as they don’t re-marry).  A few exciting changes have occurred recently in the program which should do even more to encourage eligible individuals to look into such a mortgage.

A VA loan allows enables veterans to take advantage of 100% financing without private mortgage insurance or a 20% second mortgage. A VA funding fee of 0 - 3.3% of the loan amount is paid to the VA and is allowed to be financed. Regarding a purchase, veterans are able to borrow up to 100% of the price or value of the home, whichever is less. In a refinance, veterans are able to borrow up to 90% of reasonable value, where allowed by state laws. 

The VA loan limit was raised recently to $417,000 and improvements have been made as well to the Adjustable Rate Mortgage program. While the national average home value has appreciated nearly 75% since 1995, the VA loan guaranty amount increased only by 18% in the same time. The new increase then does a great deal to make up for lost time.

The VA has also reinstated ARM (Adjustable Rate Mortgages) allowing interest rates to fluctuate with a specified index over the course of the mortgage. The VA ARM program also features annual interest rate adjustments and adjustments which will be limited to a max. increase or decrease of 1 percentage point.