I have a question about VA Home Loans

iVillage Member
Registered: 09-25-2003
I have a question about VA Home Loans
51
Wed, 02-04-2004 - 11:15pm

DH has said he'd like me to look into a VA Home Loan that we would use to purchase the home we're currently renting.

Virgo
 
iVillage Member
Registered: 03-27-2003
Sun, 02-15-2004 - 10:02pm
You don't have to put down 10% on conventional loans. Conventional/FNMA has programs that offer 100% financing and the seller can pay up to 3% in closing costs.
iVillage Member
Registered: 09-25-2003
Sun, 02-15-2004 - 10:24pm

I still don't see 2% of anything as 'sizeable'. . .if I can 'afford' a $250,000 house, I've probably got a down payment and can stand to have another 3-5000 added to the loan. . .


And I doubt that the average veteran is purchasing a $250,000 home. . .at least not through the VA program.


Virgo



Edited 2/15/2004 10:25:35 PM ET by virgogirl_914
Virgo
 
iVillage Member
Registered: 03-26-2003
Sun, 02-15-2004 - 10:28pm
If not everyone would know then you would have no way of knowing if the person you were posting to knew so sharing that fact with them might have been a good thing.

I in no way whatsover infered that you were lying about there being exemptions.

I just think that, "There are exceptions, my ex and I got an exemption because he is disabled" is a better debate point then, "There are some exceptions, because I never paid a funding fee.

It has nothing to do with whether or not I believed there were exemptions.

iVillage Member
Registered: 03-26-2003
Sun, 02-15-2004 - 10:36pm
If you have a down payment then there would be no reason to get a VA loan. That is the only advantage to a VA loan, not having to have a down payment. If someone has a down payment they would be better off getting a conventional loan.
iVillage Member
Registered: 03-26-2003
Mon, 02-16-2004 - 8:02am
Not true. A family with the cash for the down payment might choose to invest the cash elsewhere and still go for the VA Loan. Someone needing the deductions on income taxes from the mortgage interest, for example, will do better financing as much of the loan as possible, while the down payment money either goes to or remains in another investment. As long as the rate of return from the investment exceeds the interest rate on the note (not that hard right now) the money is better off NOT going into equity on the home.

or perhaps the family will be using the cash that might otherwise go towards a downpayment on improvements on the property, additions/renovations, or even to fund a college education. if you DON'T have to spend the money on a downpayment on the home, you have that money to spend elsewhere and don't have to lose the advantage of it to equity that might be VERY difficult to liquidate if you were to need it in the short term.

iVillage Member
Registered: 03-26-2003
Mon, 02-16-2004 - 8:07am
Bad choice of words on my part as I meant conventional in the more general meaning of the term; I should have said "traditional" as most people tend to think of the 10% and 20% down loans as the more traditional types of loans and those were the type I was referring to. As I understand it, the 3% loans can be difficult to get without stellar credit.
iVillage Member
Registered: 03-26-2003
Mon, 02-16-2004 - 8:12am
True, it may make sense for some to get a VA loan even if they have the money for a down payment.

Edited because I was being a snot. H & I's mom. if you read it before I had a chance to fix it I owe you an apology.


Edited 2/16/2004 1:10:59 PM ET by texigan

iVillage Member
Registered: 03-26-2003
Mon, 02-16-2004 - 8:25am
Yes, it does not look like many are using a VA loan for $250,000.

"VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy. To get a loan, a veteran must apply to a lender. If the loan is approved, VA will guarantee a portion of it to the lender. This guaranty protects the lender against loss up to the amount guaranteed and allows a veteran to obtain favorable financing terms. There is no maximum VA loan but lenders will generally limit VA loans to $240,000. This is because lenders sell VA loans in the secondary market, which currently places a $240,000 limit on the loans. For loans up to this amount, it is usually possible for qualified veterans to obtain no downpayment financing. A veteran's basic entitlement is $36,000 (or up to $60,000 for certain loans over $144,000). Lenders will generally loan up to 4 times a veteran's available entitlement without a downpayment, provided the veteran is income and credit qualified and the property appraises for the asking price"

http://www.homeloans.va.gov/factsheet.htm

Avatar for lucy4980
iVillage Member
Registered: 03-26-2003
Mon, 02-16-2004 - 2:14pm
You are indeed correct that most veterans aren't using the VA program for homes in that range. My point was that 2% of $90K is a lot different than 2% of $250K.

For us, it's a moot point though. In our area you can't buy more than a mobile home or a townhouse in a bad neighborhood for the $240K maximum.

iVillage Member
Registered: 09-25-2003
Mon, 02-16-2004 - 4:35pm

While 2% of 90K is quantitatively different than 2% of 250K, they are proportionately the SAME.

Virgo