When you get a VA loan to purchase a house the great thing is your are getting 100% financing, there is no down payment. This is the #1 of many VA loan benefits available only to veterans and active military. There is no other mainstream loan available that is 100% financing no money down.
However, when you get a VA loan to purchase a home, there are still closing costs to be paid. These VA loan closing costs are items such as:
- Escrow fees
- Title insurance
- Home insurance premium
- Property tax reserves collected by the lender
- Interest for the remainder of the month your are closing in
- Lender fees
- Appraisal fees
- Home inspection fees
First off, one great thing with VA lending is that when you get a VA loan, the seller must pay the escrow fee and the lenders processing and underwriting fee. Those are fees the VA borrower is not allowed to pay. However, there are still a significant amount of closing costs that remain that will have to be paid before closing on your house. Sometimes as much as 2-3% of the loan amount. There are still some ways to get around having to come out of your own pocket for closing costs. The #1 best way is to ask the seller to credit you 3% of the purchase price for closing costs. You can work with your real estate agent to write this into your purchase offer. If you can negotiate this, then you can have a no money down 100% loan AND not have to pay ANY closing costs! The nickname for this loan is the VA “no-no”. No money down, no closing costs.
Some other nice advantages of VA homeloans:
- To qualify for a VA Loan credit does not have to be perfect, even if you think you have bad credit you may still qualify for a VA loan
- 100% financing with VA lending – VA offers the only zero down loans today
- VA loan interest rates are at historic lows – the U.S. Government is artificially pushing down rates to stimulate the economy so take advantage of it while you can!
- $8,000 home buyer tax credit available until April 2010!
- VA homeloans allow the seller to credit you for all of your closing costs – so this + 100% financing means you can buy with almost no money out of pocket
Give me a call (858-922-7899) or email (homeloan8@gmail.com) if you have any questions or want to apply for a VA loan.
Warmest Regards,
Rob Chomentowski
Sr. Loan Officer (and VA specialist)
858-922-7899
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