Almost all home loans were conventional loans four years ago. It was common to have no money down for home loans before the financial crisis, and mortgage rendered down. Very few borrowers would like to apply for FHA or VA home loans if products like 80/20′s didn’t have mortgage insurance.
At the present, the economic outlook is greatly different compared to the past. As the number of El Paso TX Short Sales and foreclosures has increased, banks recognized that a 100% financing was not a good idea. Borrowers need to have some skin in the game. This has really slowed down the housing market, as it is hard for American’s to save up sufficient money for real estate down payments. Still, no money down loan opportunity awaits specific qualified borrowers. VA Home loan is one of these programs.
For Veteran’s who want to buy a house, the VA loan is one great program for you. It is one of the few available loans that truly offer 100% financing. You are probably qualified for the VA home loan if you have served active, full time, military service for at least 180 days. If eligible to the criteria, spouses of deceased veterans can qualify for the loan program.
The VA home loan is very generous when it comes to debt to income ratios. Up to 50% debt to income ratios is the required debt to income ratio of VA home loans. What makes VA loan more affordable than FHA loans is that it doesn’t have monthly mortgage insurance? The upfront mortgage insurance is 2.15%, which is more than FHA loans, but slightly less than USDA rural housing loans. The interest rate for conventional and FHA rates are almost the same.
The approach for Issuing home loans for the veteran’s administration and other mortgage programs are distinctive from each other. The VA home loan aims to help those who serve the country have a home. Other loan programs are very careful that they only give loans to well qualified buyers. Income, employment, and credit requirements are not nearly as strict with VA home loans as they are with FHA and conventional loans.