VA Mortgage Loans
VA Mortgage Loans

VA mortgage loans come in several varieties to suit different needs, just like conventional mortgages. The big difference is that the VA sets more lenient requirements for loan approval than what most lenders follow when approving conventional mortgage loans. Lenders are not required to follow the VA’s guidelines, and are free to impose stricter requirements than those set by the VA. Most, however, are willing to follow the looser guidelines because of the VA’s backing. You can get a new VA mortgage loan to purchase a home, or you can refinance a current loan, either a VA loan or a conventional mortgage, with a VA mortgage loan. Whether purchasing or refinancing, you have several options. Traditional VA Fixed Rate Loans The fixed rate loan is the simplest loan to understand. The interest rate and monthly payments are determined at the start, based in part on your credit, current market conditions and the length of the loan. They then remain the same throughout the life of the loan, regardless of what happens to market interest rates. Because all terms remain the same, you always know how much of each monthly payment is going toward paying off principle. Traditional VA Adjustable Rate Mortgage (ARM) ARMs are often attractive because the initial interest rate tends to be lower than the market rate. This might be tempting, but be careful and consider what might happen if interest rates rise sharply over the next year. While the VA does limit how much rates can rise […]