VA Mortgage Loans in Rockville, MD

VA Loan Lender in Rockville, MD

Buying a home is typically too expensive for most people to do out of pocket, which is why the majority of homebuyers in America take out mortgage loans. Unfortunately, many buyers do not have the credit necessary to obtain a mortgage with terms that are feasible for them, which often leads to homeowners having to pay a substantial amount of interest or not able to obtain a mortgage at all. Fortunately, there are some specialized mortgages available that not only provide favorable terms but are easier to be approved for as well.

One such mortgage is the VA loan. VA loans in Maryland are mortgage loans that are guaranteed by the U.S. Department of Veterans Affairs.

What Are VA Mortgage Loans?

Backed by the Veterans Administration and the federal government, it is similar to FHA except that you have to be a qualified Veteran or military person. There is no down payment required. There is no MI required. They have a funding fee, but that is financed into the mortgage. The funding fee varies based on your current military status and subsequent use of the VA benefit.

How Do VA Loans in Alexandria Work?

VA loans help qualified buyers to purchase property without having to pay a down payment. Most private mortgages require a down payment that’s typically between five and 20 percent of the total cost of the property. Most buyers will also have to pay a monthly private mortgage insurance if the down payment they make is anything less than 20 percent. A VA loan will provide the qualified buyer with 103.3 percent financing and does not require private mortgage insurance. Because no private mortgage insurance is required, a larger part of the loan can go towards a home purchase, meaning that qualifying borrowers will be able to afford a home at a higher value than if they were to take out a private mortgage. Keep in mind that even though VA loans do not have a maximum dollar amount in Maryland, lenders that sell VA loans on the secondary market have to limit the size of those VA loans.

Between 0 and 3.3 percent of the loan amount is to be paid to the VA as a funding fee, something that can also be financed. Qualifying buyers are exempt from this fee if they receive VA disability compensation of at least 10 percent. Homebuyers that qualify for disability compensation after they have already paid the fee to the VA can apply for a refund as long as the beginning date of their disability compensation begins before their loan’s closing date. ┬áRefinancing a VA loan is possible as well – veteran homeowners can refinance their homes for up to 100 percent of reasonable value.

VA Loan Eligibility

VA loans were established in order to help U.S. veterans or their surviving spouses obtain financing in places where private financing may not be available to them. The VA designates areas of Maryland that are eligible for VA loans. These areas tend to be areas experiencing housing credit shortage and are often in more rural areas. Although a minimum credit score is not used to pre-qualify for a VA loan, most lenders do require a minimum credit score of 620.

For more information on how to apply for a VA loan in Maryland or about VA loans in general, be sure to contact Alex Echeandia. Alex Echeandia is a VA mortgage broker licensed in the Maryland, DC and Virginia areas.