FHA Loan vs VA Home Loan
When considering a loan for your new home there a lot of options out there when it comes to securing financing. At Patriot Home Mortgage, we take a client-centered approach when it comes to finding mortgage products that meet your needs. We believe in educating our clients and putting all the information at their fingertips. It’s not our place to make the decisions for you. We merely empower you to make the decisions that best work for you and for your family and loved ones.
Veterans home loans and FHA loans are great options for those who qualify for them. Take a look at our comparison of FHA and VA home loans and see if any of these meet your unique situation.
If you’re just getting your foot wet in the housing market and you don’t have much money for a down payment, FHA loans are worth considering. The Federal Housing Administration has been helping to insure private mortgages since the 1980s. This means they cover the risk for banks who give these loans out in case people default on their loans.
Among the different types of loans, FHA loans are the most lenient when it comes to those who have credit problems. You can even get financing with as little as 3.5 percent down payment. This type of loan is particularly friendly for new homeowners because there are more relaxed standards of approval.
Some of the downsides of FHA loans are they require the payment of both an upfront and annual loan insurance premium, divided monthly. You can choose to put the upfront portion into the life of your loan. This does reduce closing costs, but it means you’ll have to pay interest on it for the life of the loan. The upfront portion can be financed into the loan, reducing the money required at closing, but you’ll be paying interest on that money for the life of the loan.
VA Home Loan
Like FHA loans, VA (Veterans Affairs) loans are ones that are secured by an agency of the federal government. Unlike FHA loans, VA loan eligibility is restricted to those who have served in the military.
The VA doesn’t place strict limits on the credit debt to income ratios. This enables a lot of veterans who might not be able to secure conventional homes to buy a house. Individual lenders are able to determine what sort of risk the borrower places on them and charge interest rates accordingly.
While VA loans can be a great way to finance a home for veterans, they are not without their downsides. Even if you are or were in the military, you might still be better off with a conventional loan if you have the down payment and credit to do so. The reason for this is interest rates are typically higher with a VA loan and there’s a funding fee of up to 2.4 percent.
Patriot Home Mortgage Will Connect You With a FHA or VA Loan Lender
At Patriot Home Mortgage we have one overarching goal: helping our clients find the perfect loan for their new home. Our consultants take a personal approach in order to connect you with the right products that meet your need. As a Top Rated Local mortgage loan broker with a 97.66 rating, we take customer service seriously. It’s no wonder we have so many satisfied clients.
Contact us today and see the difference we can make in your search for home financing.