VA Loan

The U.S. Department of Veterans Affairs (VA) Loan was created to assist servicemembers, veterans, and eligible surviving spouses in becoming homeowners. Just as with other government loans, this funding is not provided by the VA Loan in Clarksville TN  but instead, they provide a guarantee which allows lenders to provide more favorable loan terms. VA Loan in Clarksville TN.

Why is it different from other mortgages?

While, this loan program does not require a down payment, similar to the RHS loan, it is unlike the RHS loan in that mortgage insurance is not required. The reason why your lender can offer these favorable loan terms- no down payment, no mortgage insurance, and lower credit score requirements than many conventional products- is because it is backed by the VA. Meaning your mortgage lender takes on less of a risk since the VA will pay a claim if you default on the mortgage. That being said, the VA has its own set of appraisal guidelines that the property must meet; dependent on the property this means a water test or a pest inspection may be required.

There are multiple loan options available for VA loans:
→ VA purchase loan
→ VA cash-out refinance (mostly used to pull cash out of the home for equity!)
→ Loans that give the ability to renovate (similar to refinancing)
→ VA streamline refinance (no cash-out, but lower interest rates)

There aren’t a lot of disadvantages when it comes to these loans. One however is that while VA loans don’t require closing costs, there are funding fees that account for the cost of foreclosure if the buyer fails to make their mortgage payments. Also, properties must be in decent condition to qualify for a VA loan.

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