All About VA Guaranteed Home Loans
The GI Bill of Rights provides veterans with a federally guaranteed home loan with no down payment. It is the certificate that proves that you as the veteran are eligible for a VA guaranteed home loan. The VA guaranteed home loan is available to active duty and non-active duty military for the purchase of their primary residence.
Loans made by the VA are guaranteed loans, which means that the lender of the loan is protected against loss if the veteran receiving the loan is unable to repay the loan. Loans that are available through VA home loan programs have attractive financing rates and are increasingly making home ownership a reality for those who have served. VA loans help veterans finance the purchase of homes with favorable loan terms and at a fraction of interest. The interest rate on VA loans can be negotiated based on prevailing rates in the mortgage market.
Veterans may also be eligible for a property tax exemption. Veterans home loans help with mortgage debt in various ways. In addition to negotiating the interest rate with the lender, veterans may negotiate the payment of discount points and other closing costs with the seller. Ironically, it is only the active duty military, not the veterans, who are best suited for 100% lending here because they are least likely to default. We encourage veterans to shop around and make their own decisions about the type of mortgage financing to seek.
The repayment plans provide for smaller than normal monthly payments for the first few years, which gradually increase each year, and then levels off after the end of the “graduation period” to larger than normal payments for the remaining term of the loan. The annual increases in the monthly payment may be fixed or tied to an appropriate index. The increases to the monthly payment result in an early payoff of the loan in about 11 to 16 years for a typical 30 year mortgage.
The most recent survey of veterans reports another all-time high in satisfaction: 95% of veterans state they were satisfied with their experience in obtaining a VA guaranteed home loan. A VA guaranteed home loan is one that is available from a private lender. Lenders such as regular mortgage companies, or savings and loan, even a bank can issues a VA Guaranteed Home Loan.