VA Loans allow veterans to purchase a home with no down payment. VA guarantees up to 25% of a loan, or a maximum of $104,250. If you have served in active duty, did not receive a dishonorable discharge, and served for at least two years, you are eligible to take advantage of this government program. More specific guidelines may apply for different situations, so Idaho mortgage lender today to find out if you can take advantage of this federal program designed to provide housing assistance to veterans and their families.

Private lenders offer VA Loans. The purpose of the program is to allow veterans to obtain favorable financing terms without a down payment. Lenders typically require borrowers to make a down payment to get a better interest rate and qualify for a larger mortgage. By guaranteeing 25% of the value of the loan, the lender has similar protection for a portion of the loan, just as though a down payment had been made.

After the mortgage crisis, it’s practically impossible to purchase a home with no down payment. If you’re a veteran who qualifies, and want to own your own home but have no money for a down payment, this program was designed for you. A trusted Idaho mortgage broker can give you all the details you need to be on your way to home ownership!

The VA loan program also offers several refinancing options. An existing VA loan can be refinanced for a lower interest rate, referred to as a Streamline Refinance. A Cash Out Refinance can be used if you’ve owned your home long enough to have built up some equity. This type of refinance allows you to take cash out to be used for home improvements, debt consolidation, education, or a variety of other purposes. Finally, a conventional loan can be refinanced to a VA loan.

There are benefits to refinancing a conventional loan to a VA loan. However, a small fee applies to insure the loan, approximately 2.2% of the loan value. Refinancing to a VA loan can lower your interest rate, eliminate your private mortgage insurance, and allow you to take out up to 90% of the value of your home. Often, borrowers are able to reduce their monthly payments by refinancing a conventional loan to a VA loan. In addition, there are no out-of-pocket closing costs for a conventional to VA refinance, and even the 2.2% fee can be financed into the total amount of the loan.

It is impossible to obtain a home loan for 100% of the purchase price and not have to pay for private mortgage insurance through any means other than a VA loan. Through a VA loan, it’s even possible to have the seller pay all the buyer’s closing costs, which truly means a veteran could potentially purchase a home and go to closing without paying a cent out of pocket upfront.

With the market being so volatile, any veteran qualifying for the VA loan program should try to take advantage of these benefits while they last. The VA program just got additional funding for this year, but who knows what next year could bring. Contact your Idaho mortgage broker today to find out how you could buy a new home without paying a dime out-of-pocket at closing!