How VA Loans Compare to Traditional Mortgages
If you qualify for VA loans Houston options, there is almost no other type of mortgage loan program that could offer you comparable benefits. To put this into better perspective, consider a comparison between VA loans and conventional loans.
Down Payment
If you choose a conventional loan, you can expect to put anywhere from 3% to 20% down for your loan. The down payment depends on your debt-to-income ratio, your credit score, the total loan amount, and the lender’s policies. Qualified borrowers can see VA loan down payments as low as 0%.
Interest Rates
When it comes to fair mortgage company Houston lists, we are proud to say that Rock Mortgage makes the cut. We offer reasonable terms for our conventional loans. Even so, our VA loan Houston borrowers enjoy even lower interest rates. This reflects the fact that we experience less risk when the government backs a portion of the loan.
Mortgage Insurance
One of the main reasons people who seek conventional loans try to have at least a 20% down payment is to avoid private mortgage insurance. For the record, FHA home loans also require a type of mortgage insurance. However, VA loans require no mortgage insurance. Instead, there is a more affordable funding fee.
Qualification
Serving your country is no easy job, but after overcoming this, qualification for the VA loan process becomes an easy process. In fact, service members find it much easier to qualify for a VA loan than conventional loans and other mortgage programs.
Frequently Asked Questions About VA Loans
What Are the Two Main Types of VA Home Loans?
The U.S. Department of Veteran Affairs provides four different VA loan programs that fall under two broad headers: VA direct loans and VA-backed loans. There is currently only one program for VA direct loans, but there are three for VA-backed loans.
With a VA direct home loan, the VA becomes the mortgage lender, instead of a private entity. This program is known as the Native American Direct Loan. As the name implies, it is only available to Native American veterans and their spouses.
Because very few veterans can qualify for that program, most turn to VA-backed home loans. The three available programs include purchase loans, cash-out refinance loans, and interest rate reduction refinance loans. For all of these loans, Rock Mortgage becomes your lender.
Are There Any Restrictions for VA Loans?
We highly recommend VA loans Houston to all qualifying borrowers and for all qualifying properties. However, it’s important to note that borrowers can only use a VA loan to pay for a primary dwelling. The same is true of all other government-backed loans.
If you need a home loan to purchase a vacation home or investment property, you may need to rely on a conventional loan. Note that required down payments and interest rates are higher for second homes and investment properties because the risk of default tends to be higher.
The good news is that if you pay off the original loan, you can keep the property as a secondary home. You can then use another VA loan to purchase your next primary residence.
What Is a VA Loan? | Rock Mortgage — Houston, Texas
