Why Buying A Home With A VA Loan Is A Good Idea?

Even though Charlotte, NC. is not located near a military base; we are home to a wide array of military veterans who have proudly served our country. Being a retired service member I believe we are entitled to the benefits and help fellow veterans achieve the goal of home ownership through the VA loan. But I have a lot of people who ask me is it a good way to go? There are many benefits to utilizing the VA home loan program. They are no harder to qualify for than a regular FHA or conventional loan would be....Here is a list of the benefits i see with using a VA loan. First, no money down. Yes you read that correctly. When you purchase a home through the VA you are not required to put any money down for down payment. So, right off the top you have saved at least 3.5% of the sale price (which would be the lowest amount you would have to put down) on a FHA loan. You can use some of that savings to help defray closing costs you cannot get the seller to pay. Or as I have had some veterans do; asked for less in closing costs to get a reduced price and used the money they saved to pay the closing costs. Second, you do not have to pay any mortgage insurance. On any loan that has less than 20% down you are required to pay mortgage insurance premium on them. On a VA loan there is no insurance premium. It can and does make a significant difference in your monthly payments. Third, the interest rate is comparable to the FHA interest rates right now. A lot of people are under the impression because it is a VA that the interest rates are going to be higher to cover the fact that you did not have to put any money down on the house.... In fact that is wrong and the interest rates are very close to one another. These for me are three main reasons the VA loan program works and all veterans entitled should take advantage of it as I did. But, what prompted me to write this is a situation I am working on right now. I have a client that is buying a home through a VA loan. The VA is asking for additional information from her that most likely she would not have had to provide if she were going FHA. She is getting frustrated with the VA and is contemplating switching to a FHA loan. The price point on the house is $125,000. The interest rates for the FHA loan and the VA loan are identical in this scenario because of her lock in dates. The payment difference is $104.00 a month more for the FHA with 3.5% down and mortgage insurance added in. Now the mortgage insurance is for only 5 years. But after those five years the payment will only be less than the VA by $6.00 a month. Factor in how much more she paid out over five years ($6840.00 plus the 3.5% down payment of $4375.00) and you are not recouping all that money back before the mortgage is paid off...This is a perfect scenario as to why the VA is a better program for you if you qualify. Dave diCecco Realtor/Broker Coldwell Banker United www.davedicecco.com