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Buyers: What You Need to Know about Veterans Loans Right Now
If you're undergoing a permanent change of station (PCS), Heritage Real Estate Co. can help. Broker and Owner Heather M. Neill (pictured above with her son, Lt. Wesley "Wes" Neill) holds an official designation of Military Relocation Specialist (MRS) as certified by the National Association of REALTORS®. The certification process includes training specifically for VA financing, making Neill the perfect resource for any military personnel looking to make a move to the Morgantown, WV area.
In addition, Neill comes from a very strong military background: her father was in the U.S. Marine Corps; her sister, brother-in-law, and son were in the U.S. Navy; her brother was in the U.S. Army; and an uncle was in the U.S. Air Force. Neill herself is a member of the Daughters of the American Revolution.
Neill understands the challenges of a military move and can help you navigate the requirements of the VA loan program to purchase one of these Morgantown homes for sale.
Obtaining a VA Loan
A VA loan is a mortgage loan guaranteed by the U.S. Dept. of Veterans Affairs (VA) that enables active-duty service members, veterans, plus qualifying surviving spouses to eventually become homeowners. VA home loans are funded by private lenders, including banks and mortgage companies. Since the mortgage is backed by the federal government, you get to enjoy more favorable loan terms.
Other commonly-known advantages of VA home loans include:
- No down payment required
- Competitively low interest rates
- No need for Private Mortgage Insurance (PMI)
- Veterans' loans are a lifetime benefit you can use over and over
For the vast number of military borrowers, veterans' loans are the most impactful and favorable lending programs on the market. As Veterans Day approaches on November 11, let's discuss some of the unique quirks and updates you might not know about VA loans and military relocation.
A VA Loan Comes with a Mandatory Fee
The VA funding fee refers to a one-time payment you'll have to pay on a VA-guaranteed or VA direct home loan. The funding fee is designed to support the VA home loan program since it doesn't require down payments or monthly mortgage insurance.
The fee changes periodically. As of January 1, 2020, the VA funding fee rose from 2.15-2.30% for first-time borrowers and 2.40% to 3.60% for subsequent borrowers. The current fee structure is expected to remain in place through 2022.
The funding fee is due at the time of closing. It can be paid upfront as a closing cost or financed as part of the loan. You can reduce the funding fee by putting a down payment on the mortgage. A down payment of 5-10% will cut the funding fee down to 1.65% for both first-timers and return borrowers. Similarly, a down of 10% or more will reduce the fee to 1.4%.
You're probably wondering, "Should I wait until the fee drops?" The truth is, the fee may never come down. If you're in a position to buy, now's a great time to do so: Interest rates are at historic lows, and housing prices might get higher the longer you wait.
VA Loans No Longer Have Value Limits
As of 2020, VA loan limits no longer apply to qualified veterans with their full loan entitlement. In principle, there's no limitation as to how much an applicant can borrow when applying for a VA loan. You can apply for a loan as sizeable as you financially qualify for.
However, a VA loan limit determines what you can borrow minus down payment, and the current limits no longer apply if you have full VA loan entitlement.
You have full entitlement if:
- You have never used your VA home loan benefit, or
- You have paid a previous VA loan in full and sold the property, or
- You've repaid your VA home loan in full after a foreclosure or compromise claim
If you don't satisfy at least one of the above terms, your entitlement is limited, which means you're subject to a home loan limit. For those with reduced entitlement, VA loan limits vary from $548,250 to $822,375 for a single-family home based on the county where you live.
While VA loan limits and entitlements can be confusing, our real estate agents will gladly help you out. Contact us and take advantage of our wealth of knowledge of the home-buying process.
Bill Porter, Broker
(304) 612-3746207 Aurora Dr
Morgantown, WV 26508
WEST VIRGINIA LICENSES BROKER WVB240300963
AGENCY 010271-00
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Office License No. 010271-00