Page 7 - Desert Oracle March 2019

VA Home Loan

Now and then I’m asked by my fellow veterans about the Department of Veterans

Affairs (VA) home loans and how and where to get information about the Home Loan

Benefit. Below is a description of what is called the VA Home Loan Guaranty.

The VA offers assistance to service members, veterans, and eligible surviving

spouses on becoming homeowners. The Home Loans are provided by private lenders,

such as banks and mortgage companies. The VA guarantees a portion of the home

loan, enabling that lender to provide you with more favorable terms.

Majority of the VA Home Loans are handled entirely by private lenders, and the VA

rarely gets involved in the loan approval process. The VA's actual assistance and the

most significant advantage to you are that the VA "stands behind" the loan by

guaranteeing a portion of it. So if something goes wrong and you can't make the

payments anymore, the lending institution can go to the VA to cover any losses they

might incur. The VA loan guaranty is the "insurance" that they provide the lender. That

advantage "insurance" the VA provides is how lenders can offer more favorable terms,

including:

• No down payment as long as the sales price doesn't exceed the appraised value

• No private mortgage insurance premium requirement

• VA rules limit the amount you can be charged for closing costs

• Closing costs may be paid by the seller

• The lender can't charge you a penalty fee if you pay the loan off early