New American Funding VA Loans – 2019
New American Funding VA loans: When you are searching for a mortgage loan, you may wish to consider New American Funding. Headquartered in Orange County, California, New American Funding’s mission is to provide a broad range of mortgage programs to assist both current homeowners interested in refinancing, or those who are interested in buying a home. One of the many programs they offer is VA loans.
VA Loan Overview
VA loans are those home loans which are guaranteed by the U.S. Department of Veteran Affairs. These loans are offered to active duty, retired, and in some cases, surviving spouses of veterans. These loans may be offered by banks and mortgage companies and have favorable terms for those who qualify.
VA loans offer features not available to people who do not qualify. One example of this is that a VA loan may be for up to 103 percent of the sale price of the home you are purchasing. Additionally, these loans are not required to have private mortgage insurance, a requirement other insured loans have should the borrower put down less than 20 percent of the purchase price.
Benefits of a VA Loan
There are several benefits which you can take advantage of if you qualify for a VA loan. Some of these include:
- No Down Payment Loans – while other mortgage lenders may require as little as three percent down payment, those who qualify for a VA loan can obtain a loan to purchase a home with no money down. This is a significant benefit since this allows those who qualify to obtain their home and not drain their savings accounts at the same time.
- Private Mortgage Insurance – borrowers who put down less than 20 percent of the purchase price on their homes are required to have private mortgage insurance (PMI). The premiums on this insurance add to the burden of making monthly payments. Regardless of how little you put down on your mortgage, VA loans have no requirement for PMI.
- Lower Interest Rates – while each lender is free to set their own interest rates, in general, a VA loan has lower rates than other traditional mortgages. In most cases, a VA backed loan interest rate is significantly lower than FHA and other mortgage loans, as much as one percent lower depending on the lender.
- Prepayment Penalties – while some lenders use prepayment penalties as insurance they will continue to collect on a mortgage for 20 to 30 years, VA guaranteed mortgages have no penalty for early prepayment.
These are only a few of the benefits associated with VA loans, your mortgage broker or lender can help you understand the other benefits including being able to finance the fee the VA charges for funding your loan.
Requirements of VA Loans
To be eligible for a VA mortgage, there are specific criteria which must be met. While active duty military members are eligible immediately upon obtaining 90 days of active service, veterans must have a specific number of months of service to qualify for a VA loan.
Veterans of WWII, the Korean War, the Vietnam War and Gulf War who had at least 90 days of active duty and were discharged from active service with anything other than a dishonorable discharge. There are exceptions to this rule, veterans who were discharged due to a disability connected to their service even if they had less than 90 days service are eligible. There may be other restrictions placed on your eligibility which you can determine by obtaining a Certificate of Eligibility from the Veteran’s Administration.
Members of the National Guard and Reserves also may be eligible for VA loans depending on numerous factors primarily tied to the length of service. In general, the eligibility is six years of service which may be waived if you were discharged due to service-related disability. Spouses of veterans who have not remarried and are collecting Dependency and Indemnity Compensation (DIC) or those whose spouses were killed in the line of duty or reported missing in action may also be eligible.
VA Loan Options
VA loans may be used for purchasing or for refinancing an existing loan. You can elect a fixed-rate or adjustable rate mortgage depending on various factors including prevailing interest rates. There is one restriction you should be aware of before applying for a VA loan which is the property may not be solely for investment purposes.
Once your eligibility has been established, the home you purchase may be a single-family home, multi-family home that you intend to occupy, and you may also purchase farmland with a home located on it although you cannot purchase simply the farmland.
There are a number of condominium and townhouse developments which are approved for VA loans and if you happen to find one that is not approved, it may be possible to have them approved. This is something you should discuss with your VA mortgage lender.
For those veterans who already own a home, there are other loan options available to them such as IRRRL Streamline Refinance or a cash out refinance. The IRRL is a non-cash out option designed to change your loan terms while the cash out refinance allows you to tap into the equity in your home for other purposes including upgrades to your home.
If you are considering purchasing a home or refinancing your existing mortgage using a VA loan, New American Funding offers a full range of VA loans to meet your needs.