Veterans know that if they plan to use the VA Home Loan Guarantee Program to purchase a home that they are taking advantage of a valuable benefit that they earned from their service. This benefit allows veterans who are eligible to purchase a home with easier qualifying guidelines that traditional lenders.
Some of the reasons it is easier for a veteran to purchase a home through the VA Home Loan Guarantee Program include:
• The VA guarantees the loan. When a lender sees that a portion of the loan is guaranteed by the VA, they know they have a low risk investment. Even if the veteran does not pay the loan, the lender will still get some of their loan money back and the property to sell. This makes the loan more secure that traditional borrower’s loans and is one of the reasons why it makes it easier to qualify for applicants.
• Their eligibility can be determined within minutes. All a veteran needs to do is go into a VA approved lender and they can determine through the ACE system on the computer if the veteran is eligible to use the VA home loan guarantee program.
• The VA helps veterans who are in jeopardy of losing their homes. Lenders feel more secure knowing that the VA is behind these borrowers because the VA will help find solutions to problems in the case a veteran has financial difficulties. As a result of this, the borrower is less likely to default on their loan and the lender is more confident that they will be repaid by the terms of the mortgage contract.
• If you are still active in the service, then your employment is easily verifiable. One road block many people face is proof of income and employment. If you are an active service member then your income and employment are verified by the Federal Government.
• You are purchasing a home with no down payment, but it is treated as if you have a down payment. Even if you have $0 down, the lender considers the VA guarantee to be similar to a down payment. All a down payment does is ensures the lender that you are invested in the home purchase and will not walk away without paying back the loan. It also allows them to have some equity in your home in the case they need to sell it so that they can make their money back. With the VA guarantee the lender is already certain they will get their money back, so a down payment is not necessary.
If you are a veteran considering a near future home purchase, you should take advantage of the VA Home Loan Guarantee Program in order to have an easier time qualifying for a loan. For more information on the VA Home Loan Guarantee Program go to www.VaStreamlineOnline.com
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