You may qualify for mortgage loan programs, but here’s how to know if you should follow through.
Mortgage loan programs can be a great prospect for aspiring homeowners. VA loans are a popular example of successful loan assistance options – they’ve been a way to incentivize home loans for military families and boost the housing market for decades. But there are a few gray areas to this seemingly black and white decision; make sure you know all the benefits and ramifications of signing on for a VA loan. Here are a few:
- No Down Payment. This has to qualify as a definite pro. The fact military families can secure a home with zero down payment is a huge bonus because it eliminates a common major hurdle that many prospective homeowners face.
- Minimum 25% Guarantee. The government is guaranteed to back at least this much of every VA loan, which is why you don’t need a down payment or traditional mortgage insurance. Another obvious plus!
- Limited Closing Costs. Lenders’ fees cannot exceed a certain amount with VA loans, which protects borrowers from excessive closing costs.
- Upfront Fees. One of the downsides to a VA loan is the upfront cost, an application fee that can range all the way up to 3% of the amount you borrow.
- Fixer-Upper Problem. Traditional loan programs generally include for the possibility of repair work. But with VA loans, you can’t borrow in excess of the amount the house is worth at the time of purchase. This means repairs will be left up to you and your pocketbook.
Wondering if a VA loan is right for you? Contact us to get more information from our professional team at Midland Mortgage to find the best mortgage loan program for you.