Understanding VA Loans: 5 Restrictions You Should Know About
It's important to remember that loans involve more than just the initial payment, which is why potential homeowners need to understand the consequences and limitations of financing choices. Since it's famous for being a $0 down payment mortgage option, it's not uncommon for eligible applicants for VA loans to overestimate the potential benefits they will receive.
The limits and restrictions of VA loans
Before you lock in with a VA loan, it's best to look at the potential drawbacks you need to accept. Although a VA loan is a premium option for eligible loan applicants, their exclusivity to veterans and their spouses may prevent people from realizing some of its limitations.
Before you opt-in to a VA loan from your chosen provider, here are five facts you need to know:
1. VA loans limit you from taking multiple loans simultaneously
A VA loan is mostly for securing a primary home, so veterans don't usually apply for several VA loans simultaneously. However, it's not impossible to take out multiple VA loans at the same time. This will result in an adjustment in the amount of down payment you can pay for the second application.
2. VA loans have a specific loan limit
VA home loans will generally have a restrictive limit if you have several VA home loans active. However, several mortgage lenders can allow up to $5 million on a $0-down payment contract. Keep in mind that these loan ceilings will still depend on a mortgage company's guidelines on lending policies.
3. It's easier to qualify for VA loan
Being eligible for a VA loan is an enormous privilege since most lending companies have a lenient requirement for applicants. Although some lenders will look for a particular credit score, VA loans don't exactly have a minimum credit score requirement. This is why it's necessary to shop for lenders with the most agreeable mortgage packages that will match your current financial situation.
4. Sellers won't have trouble accepting VA loan offers
Contrary to popular belief, the seller doesn't have to shoulder the resulting closing fees in accepting a buyer's VA loan. Although there's a benefit of no down payment, the seller doesn't shoulder the rest of the buyer's fees from their own pocket. The seller usually just pays for a termite report, while other costs are beyond the seller's responsibilities.
5. You can refinance into a VA home loan as long as you're an eligible borrower
This clause in VA loans is necessary to remember, especially if you're weighing your long-term financial options. You may refinance into a VA loan, regardless of your initial loan type, and can account for over 100% of your home's value. It's a strategic move that you should consult with a mortgage expert to ensure that you'll gain an advantage from the exclusive loan program's benefits.
VA Loans Expert in Ewa Beach: HI Velocity Mortgage
Although VA loans sound intrinsically beneficial to any eligible applicant, it's vital to have an overview of what you're trading off as an opportunity cost. Many homebuyers commit the mistake of having a tunnel-vision of their investments and assets. It's better to be well-informed of your financial choices before you make a mistake that you'll end up paying for a long time. For this reason, it's a huge advantage to connect with mortgage experts
If you need a reliable mortgage company in Ewa Beach to help with your financing options, we're happy to help. Get a free consultation with our mortgage experts today by contacting us at (808) 727-1055.