Busting 4 Misconceptions Surrounding VA Loans

VA loans are provided to members of the armed forces. VA home loans in Texas and other parts of the country are guaranteed by the Department of Veteran Affairs. These loans can be used to purchase different types of properties including single-family homes and condominiums. There are many benefits of  these loans. VA loan rates in Texas and other parts of the country are lower than their conventional counterparts, which helps save more. VA loans have been around for quite some time now, however, there are still some myths about them doing rounds in the market. The purpose of the post is to debunk some of these misconceptions. Keep reading to learn more.

1. VA loan is no better than any other conventional loan on the market 

Many borrowers and critics rubbish VA loans as just any other loan. The fact, however, is that VA loans come with a bundle of benefits. Qualified buyers, for instance, can borrow more than $400,000 in several locations without making a down payment. VA loan borrowers do not have to pay mortgage insurance; a benefit that can help them save up to $200 per month. Other benefits include low interest rates and a cap on lender closing costs.

2. Borrowers with a bad credit score do not qualify

The VA does not have any minimum credit score requirements for borrowers, however, many lenders would be more willing to lend to borrowers with a FICO credit score of 620 or more, which is significantly lower than what many conventional loans require (a credit score of 660 or more). For borrowers who have filed bankruptcy recently, VA loans have a shorter waiting time as compared to conventional loans.

3. VA loans have long closing time

Many borrowers wrongly belief that the moment they apply for a VA loan they would have to wade through bureaucracy and lengthy paperwork, which can result in agonisingly long closing time. The fact, however, is that with a closing time of 40-50 days, VA loans, in many cases close earlier than conventional loans. Studies also show that VA loans are more likely to close than other loans.

4. VA loan can be availed only once 

VA loan is not a one time benefit and qualifying veterans can use the VA Loan Guarantee Program multiple times. Even veterans who are facing foreclosure can be eligible.

Sum up

VA loan was created in 1944 and has been around for quite some time now, however, still one in three veterans do not know about this benefit. Many others do not have full info about the loan. If you are a veteran looking for a home loan, do not let these myths shroud your judgement and talk to a mortgage consultant to know the loan best suited for your situation.

What the First Time Home Buyer in Texas Must Know

In the excitement of realizing their dream, first time home buyers can make some elementary mistakes. The falling housing market since the financial downturn of 2008 has made it even more difficult for them to choose a suitable home loan option as now they need to consider many variables for making the right decision. Some of these include their credit score, current income, type of property they want to buy, and of course mortgage interest rates.

Well, if you have friends and relatives in Texas who are aware of all the loan options and there is no vested interest for suggesting a particular loan, it could resolve your concern. However, it is advisable to learn about your options based on various factors. Before getting to know what your best options could be, let us learn about a few common mistakes the first time home buyer makes so that you avoid making them yourself:

• Unrealistic estimation – Shifting from a rental to your own home entails a new responsibility. Keep in mind that if you wish to buy property, it could be overpriced, and you may end up paying a higher monthly payment. In order to avoid such situations, hire a reputed lender that can weed out such possibilities.

• Choosing the wrong Realtor – First time home buyers need to find a realtor who understands their anxieties and confusions; and has the experience making the process easily understandable. You do not want a pushy realtor to rush you into buying a home that you may regret later. So, do your homework, and also ask your friends and relatives to recommend a realtor who specializes in first time home buying.

• Not checking out all the available loan options – Buying a home for the first time needs sound judgment. Many first time buyers are not aware of the various flexible loan programs, and opt for loans that are more expensive.

• Not understanding the contract – Do not hesitate to get detailed clarification from your realtor regarding the home loan contract. Not understanding even a seemingly simple clause can lead to serious financial or legal complications in the future.

Texas First time home-buyer bond program
For first time home buyers in Texas, the first time homebuyer bond program can be the best option in terms of suitability. Some important features of this program are:

• Meant for borrowers with low or moderate income, and who look to buy a home for the first time
• 30-year repayable mortgage for home loans with competitive interest rates
• Help in lower down payments and closing costs

 The terms mentioned above make the first time homebuyer bond program a good option for many borrowers. Consult with your lender in detail to find the loan program that is most suitable for you.