Online Calculator | VA Home Loan Vs FHA Loan Programs

VA Home Loan Vs FHA Loan Programs

Almost all home loans were conventional loans. It was common to have no money down for home loans before the financial crisis, and mortgage rendered down. With products like 80/20′s with no mortgage insurance, very few borrowers had reason to apply for FHA or VA home loans.

The financial attitude today is to a large extent different. Banks understood that a 100% financing was a bad idea right after home prices were declining and foreclosures increase. It is a need for borrowers 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. However, for certain eligible people, there are still no money down loan options. One of these programs is the VA Home loan.

For Veteran’s who want to buy a house, the VA loan is one greta program for you. It is one of the few available loans that truly offer 100% financing. If you have served active, full time, military service for at least 180 days, you could be pre-approved for a VA home loan. The loan program also qualifies the spouses of the deceased veterans.

The requisite debt to income ratios is very liberal on VA loans. Potential borrowers can qualify for VA home loans with as much as 50% debt to income ratios. No monthly mortgage insurance is what makes VA home loans different and more affrodable than FHA loans. It does have an upfront mortgage insurance of 2.15%, which is more than FHA loans, but slightly less than USDA rural housing loans. Likewise, the interest rate is similar to conventional and FHA rates.

The veteran’s administration has a different mindset for issuing loans compared to other mortgage programs. The VA home loan aims to help those who serve the country have a home. Only well qualified home buyers get approved home loan by other loan programs. Income, employment, and credit requirements are not nearly as strict with VA home loans as they are with FHA and conventional loans.

 

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