14 Jan Common Questions When Buying Your First Home With VA Home Loan
First-time homebuyers are quite apprehensive when choosing a loan, especially VA home loan borrowers. The reason for this is the doubts surrounding them. How will I qualify for a VA home loan? What documents should I keep? How much will be the down payment?
To help you get a better understanding of VA loan benefits, we have answered some of the frequently asked VA loan questions by the borrowers.
Do I need to make a down payment to purchase my first home?
One of the main reasons service members opt for a VA home loan is that it doesn’t require the borrower to make a downpayment. In the year 2013, 89% of all VA home loans were sanctioned with no down payment.
However, getting a VA loan with no down payment depends on a few factors. For example, if you want, you can lower your VA funding fee against a down payment, or if you purchase a home priced over your loan limit, you may need to make a downpayment. But in most cases, a VA home is sanctioned without any upfront cost.
Do I need to have a strong credit history to qualify for a VA loan?
Qualified mortgage rules have undergone some changes. However, VA home loans are offered to borrowers on the same terms as earlier. As it was in the past, you don’t need to have a robust credit history to qualify for a VA home loan. However, some lenders may require the borrower’s credit score to be around 640 or more.
How much cash should I keep for the closing day?
It depends on a few factors. If the seller agrees to pay all your allowable closing costs, including up to 4% concession, you won’t have to pay anything at the closing. The allowable closing costs may also include your VA funding fee. First-time homebuyers need to pay up to a 2.4% funding fee. You must know how much the seller is willing to pay to be able to negotiate your purchase accordingly.
How can I get a VA home loan for the lowest interest rate?
Mortgage loan rates can make you crazy. You could expect a healthy change in the VA loan rates every six months or a year. However, a change of a tenth or two of a point shouldn’t bother you as it won’t affect your monthly payment by much. A bigger change will certainly increase your loan payment. Thankfully, in comparison to conventional loans, VA loans are offered at lower interest rates.
Hopefully, we have covered all your basic doubts. If you’re planning to get a VA home loan, we suggest you consult an experienced VA home loan agent.