A VA mortgage has numerous benefits. A VA mortgage loan can be guaranteed with no down payment, and there is also no personal mortgage insurance requirement with a VA guaranteed loan, which could offer you significant savings on your monthly payment.
You can even use your VA loan benefits to refinance an existing loan — even if it’s not a VA loan. Be sure to find out about the interest reduction loan. This program matches an adjustable rate mortgage to a fixed rate loan that is part of the Streamline Refinance Program, which allows you to refinance with little or no cost.
We’ve scoured the web to find useful tips for our members to help them prepare to take advantage of this exclusive benefit. The following is a collection of useful, concise Veteran Administration Home Loan Tips.
Tip #1: First check your creditworthiness
Did you know that over 70% of all credit reports in the United States contain errors? Your lender will look at your credit report and make important decisions based on the information it contains — decisions that can make a big difference in the bottom line.
Because lenders use complicated valuation formulas to determine how much you can borrow and at what interest rate, it would be a good idea to check your credit report for inaccuracies. Make sure you get a report that gives you information from all three major credit bureaus, as each one can be different. You can get your credit report from each of the three offices free of charge, once a year.
What may seem minor to you may not be to a lender. Contact the credit bureaus to correct errors. This can result in significant savings on the cost of your loan.
Tip #2: .Get pre-approved
Before you start looking for a home, it’s best to get your VA loan amount pre-approved. The time you literally save is yours. Once you have determined the approved loan amount, you can start looking for an apartment with peace of mind. In a tight housing market, it also gives you a clue as to the seller, as other potential buyers may not have taken this important step.
Knowing beforehand what you can afford offers a lot of security. This kind of security will go a long way if you are looking for the best value for your money. Having a VA mortgage is an excellent benefit, but finding the right home is just as important. With pre-approval, you avoid wasting time on houses that are out of your price range or sellers who are unsure if you are a serious buyer.
Tip #3: Choose Wisely – Fixed or Variable Rate Loans?
Chances are, you’ll be looking for your VA guaranteed loan in the same places people go for non-VA home loans or traditional loans. It’s always worth looking around, which is why we’re comparing you to up five lenders on military.com. You can opt for a fixed-rate loan that you negotiate with the lender, but discount the option of an adjustable-rate (ARM) VA mortgage.
The interest on an ARM can be adjusted by 1 percent annually and by up to 5 percent over the life of the loan. So should you go for a fixed rate or an adjustable rate? It really depends on the buyer: in a rising-rate environment, a fixed-rate loan can offer some security, but for those who may not plan to stay in their home for more than a few years, an ARM can now offer significant savings. The best advice is to do your homework, find the cheapest price, and not take the first offer that comes along. That’s a mistake often made by first-time buyers who are excited to get into a home. The time you spend now can save you thousands dollars in the coming years.
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