VA Loan Updates

Program helpful to vets, active-duty personnel, sellers in difficult market With that government assurance, participating lenders are willing to give borrowers loans for the full price of their homes. VA mortgages do not require the private mortgage insurance that is usually necessary for loans with little or no down payment. The absence of PMI saves borrowers hundreds of dollars each month. Qualified veterans and active-duty military personnel can buy a home for as much as $417,000 without a down payment or private mortgage insurance. Borrowers can add some down payment money to the mix and use the VA program for homes that cost more than $417,000. Opens up $500,000 price range Larger VA loans may become more common now that the Government National Mortgage Association, Ginnie Mae, which packages VA loans for the secondary market, has changed its rules to allow larger VA loans if the borrower makes a down payment of at least 25 percent of the portion of the home's price that exceeds $417,000. "Chase will actually lend up to $1 million for VA, not that anyone is lining up for that. What this is doing is opening up that $500,000 to $600,000 price range to VA mortgages," said Dave Morton, with Chase Mortgage in Fredericksburg, Va. If a veteran were to buy a $500,000 home, for example, the first $417,000 would require no down payment. For the remaining $83,000, the veteran would need to make a down payment of 25 percent, or $20,750. All together, the veteran would be making a 4.15 percent down payment on a $500,000 home, without owing PMI. Borrowers do have to pay a funding fee at closing that ranges from 1.5 percent to 3.3 percent of the loan amount, depending on whether it's the first time they have used the program and whether they make a down payment. For a veteran buying for the first time with zero down payment, the fee would be 2.15 percent of the home's price. For veterans of the reserves or National Guard, it would be 2.4 percent. The fee is waived for veterans with service-connected disabilities. The fee can be rolled into the loan balance and paid over time. But, considering buyers' extra leverage in negotiations these days, some sellers might be persuaded to pick up that fee along with other closing costs. The hassle factor long associated with VA mortgages is greatly diminished now, according to people who have worked with the program. Steiner from Weichert Financial said lenders can order appraisals by computer and get a quick turnaround. "They've re-ally sped up the process and eliminated a lot of the headache involved with going with VA," he said. Caden said, "We're telling Realtors and lenders that if they haven't made a VA loan in many years, it's quite different." Veterans and active-duty personnel can go online to www.homeloans.va.gov for more information and to apply for a certificate of eligibil- ity, which they need to start the VA mortgage application process. Found here. Sphere: Related Content