Purchasing a home in Arizona with a VA Loan
Today’s guest article comes from Brandon Laughridge and our friends at MortgageLoanPlace.com and covers the topic of VA Loans.
One of the nation’s best home loan programs was created specifically for veterans and their families. Today, VA loans remain among the country’s most popular, and with good reason. VA loans provide a degree of flexibility and low-cost incentive that few loans, if any, can match.
The Veterans Administration does not issue loans. Rather, it guarantees the loans, giving lenders financial security that often translates to excellent loan terms for qualified borrowers. The VA offers several types of loans, from home construction and purchase to loans that can be used for energy efficiency improvements.
Besides the ultra-competitive rates, VA loans come with a host of other significant benefits for veterans and their families. There is no down payment requirement on a home with a VA loan. Borrowers also do not have to pay for private mortgage insurance every month.
Qualified borrowers can receive up to 100 percent of a home’s value. The VA uses loan limits that vary by state. Borrowers cannot exceed these established limits, which currently max out at $729,000 in high-cost areas of the country. Right now, the loan limit for Maricopa County and the Scottsdale region of Arizona is $417,000.
For active-duty military members, interest rates on VA loans are capped at 6 percent. Many military members can make interest-only payments while on active duty, ensuring that banks or other lending institutions cannot foreclose on their home.
Closing costs are also capped and can be pooled with the overall cost of the loan. VA loan holders can also prepay on their loans without financial penalty. Even veterans with conventional home loans can utilize a VA loan to refinance up to 90 percent of their home’s appraised value.
There are some eligibility requirements for veterans interested in obtaining a VA loan. First, veterans must obtain a Certificate of Eligibility, which certifies that they meet the program’s initial criteria.
Any military member who has served 181 days on active duty during peace time or 90 days during war time may be eligible, along with those who have served at least six years in the Reserves or National Guard. Spouses of service members killed in the line of duty may also be eligible.
Not everyone who is eligible will qualify for a VA loan. The agency will ultimately examine a veteran’s credit and financial history, along with other key indicators. But veterans with poor or even no credit history can obtain a VA home loan. So can those with bankruptcy or foreclosure in their past.