The U.S. Department of Veteran Affairs has designed the VA loan program for veterans and current servicemen who find it difficult to obtain conventional mortgages. The basic eligibility for a VA loan requires applicants to be an active or retired military service personnel. There are even state-specific VA mortgages such as Texas Veteran Home Loan that eligible military servicemen in the state can obtain to buy a home. There are, however, many borrowers who are unaware of the common features of VA mortgage and Texas Veteran Home Loans. So, to clear the smokescreen, let’s take a look at the finer lines.
Reusability
VA home loans allow you to use your full VA entitlement multiple times, as long as you pay off the loan every time. You can even secure an additional loan, in case you have lost the previous loan due to foreclosure or an existing VA loan.
Eligible Property Types
You can apply for a Veteran Affairs loan if you are buying a property that is in a move-in condition. These properties include condos, single-family homes, modular housing, and multi-family homes. Avoid applying for a VA loan if you plan to buy a working farm, a fixer-upper or a downtown deli, or even land.
Government Guarantee
The U.S Department of Veteran Affairs guarantees every qualified mortgage loan. This guarantee gives confidence to the lenders on the credibility of the service members and helps borrowers obtain competitive interest rates on VA Loans. This guarantee, however, does not automatically qualify veterans to receive a VA loan. They still need to qualify based on their assets, income, and credit profile.
Availability despite Bankruptcy or Foreclosure
Military veterans even with a history of foreclosure or bankruptcy are eligible for a VA home loan. If you have an existing VA loan, and later faces bankruptcy or foreclosure, can continue using their VA loan benefits.
No Need for Mortgage Insurance
The guaranty that comes with a Texas Veteran Home Loan eliminates the need for any mortgage insurance. Borrowers can, therefore, save on additional expenses that they would have otherwise paid as mortgage insurance premium every month.
Funding Fee
There is a mandatory funding fee that comes with every VA home loan. It ranges from zero up to 3.15 percent of the entire loan amount. Funding fee can easily be rolled into a VA loan. Veteran Affairs loans can, therefore, total up to 103.15 percent of the sale price. Additionally, VA loans free you from having to bear any prepayment penalty.
Texas Veteran Loans Vs. VA Loans
Despite fundamental similarities between Texas Veteran Home Loans and VA mortgage, there are some differences that you need to know. The interest rates are one of the key difference between these two loan programs. The Texas Veterans Land Board decides the rates for Texas Veteran Loans, whereas the lenders of VA Loans set interest rates of VA Mortgages. Besides, Texas Veteran Loans can only be used for home purchases and not for refinance. They can be originated under the guidelines for a VA, FHA or Conventional loan.
Conclusion
VA Loans work as a great option for military veterans to buy or build a home in the state of Texas. Knowing the above features of Texas VA home loan and its difference from VA mortgage is sure to help potential borrowers choose and qualify for a suitable option. When in doubt, it is always advisable to consult an expert. Hope this read helps.
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