VA Loans

The United States Government, in an effort to thank its citizens for service in the armed forces, has developed a number of benefits for their veterans. One of the benefits is a VA loan. A VA loan is, basically, a guarantee by the US Department of Veterans Affairs placed on a loan or mortgage given to a veteran or his or her surviving spouse.

This guarantee was designed to allow veterans and their families to secure or to supply home financing to eligible veterans in areas where private financing is not generally available. Another benefit is that the guarantee program allows veterans to purchase a property with no down payment. Typically, an eligible area is an area where there is a housing credit shortage. These areas are typically rural or in small cities and towns that are not near metropolitan or commuting centers of large cities.

Any VA loan will allow a veteran to finance his or her new home 100% without private mortgage insurance. A second mortgage can be obtained at 20% of the home’s value. In the loan there is a VA funding fee of 0% to 3.3% which is paid to the VA and can be financed into the loan as well.

When purchasing a home in an eligible area, a veteran can borrow up to 100% of the sales price or the reasonable value of the home. The veteran gets to borrow the lesser value. Because there is not a monthly private mortgage insurance payment in the monthly payment, more of each month’s payment goes towards paying off the loan and all of its interest. This allows for a larger loan with the same monthly payment as a smaller, non-VA loan.

Contact a Boston Bankruptcy Attorney

If you have used a VA guarantee on your adjustable rate mortgage and are now facing a serious financial issue, contact the Boston bankruptcy attorneys of Joshua Spirn & Associates at 1-800-975-5346.