A few years ago almost all home loans were conventional loans. Prior to the mortgage melt down and financial crisis, no money home loan were very popular. Mortgage insurance for 80/20′s was an important consideration for borrowers so they can proceed to applying for a FHA or VA home loan.
At the present, the economic outlook is greatly different compared to the past. Banks understood that a 100% financing was a bad idea right after home prices were declining and foreclosures increase. Borrowers need to have some skin in the game. This has really slowed down the housing market, as it is hard for American’s to save up sufficient money for real estate down payments. On the other hand, particular qualified borrowers coudl still avail for a no money loan.. VA Home loan is one of these programs.
For Veteran’s who want to buy a house, the VA loan is one greta program for you. It is one of the few available loans that truly offer 100% financing. You are probably qualified for the VA home loan if you have served active, full time, military service for at least 180 days. Not only active, full time, military service individualscan qulaify for this loan, but also spouses of deceased vets.
The VA loan offers very liberal debt to income ratios. Potential borrowers can qualify for VA home loans with as much as 50% debt to income ratios. The VA loan has no monthly mortgage insurance, making it more affordable than FHA loans. It has an upfront mortgage insurance of 2.15%, which is more than FHA loans, but slightly less than USDA rural housing loans. The interest rate for conventional and FHA rates are almost the same.
The approach for Issuing home loans for the veteran’s administration and other mortgage programs are distinctive from each other. The VA home loan aims to help those who serve the country have a home. Other loan programs are very careful that they only give loans to well qualified buyers. With VA home loans, income, employment, and credit requirements are not nearly as strict as compared to that of FHA and conventional loans.