Veterans Administration Loans for Zero Down Payment borrowers

One of the many benefits available to honorably discharged veterans is the VA Home Loan Benefit.

Basically, it will allow you to buy a home with ZERO DOWN PAYMENT and get a low-interest rate at the same time.  Normally, if you put less money down, you would expect to pay more in rate than someone with a larger down payment but this is not the case with a VA home loan.

Right now, we can get qualified veterans 30 year interest rates in the mid 3 percent range.  This equals $4.49 per thousand borrowed in a monthly payment.  A $100,000 loan would have a payment of $449 per month not including taxes and insurance.  At this rate, buying a home certainly costs less than rent in the Boise area.

How does the Veterans Administration offer this?  First of all, the loan is not from the government but instead its secured by the VA.  The loan is made by lenders to the borrowers according to the VA loan program.

If  XYZ Bank makes a loan to a veteran and later the veteran goes into foreclosure, the bank takes the initial loss.  The VA pays the bank for the defaulted loan, making them whole and takes the house back as collateral for the money lost.

This might seem risky, but the VA loan guidelines are written in such a way as to encourage responsible lending and not letting veterans get over indebted.  Furthermore, Veterans by nature of their service, have demonstrated the ability to follow the rules and generally don’t go into default nearly as much as other home buyers.

How does one qualify for a VA loan?  Its easy, you call your local lender and ask for a VA loan specialist.  If you don’t have one, I can be reached at 861-7579.  They determine quickly if you qualify and can give you an estimate of the payment on the home you are looking at.  You don’t need your original certificate of eligibility, instead, the lender will retrieve it directly from the VA.

 

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