If you’re an honorably discharged veteran of the U.S. Armed Forces thinking about buying a home for sale in Scottsdale, you may be able to use your VA loan benefit to do so – but how much do you know about it? This guide explains.
Can You Use a VA Loan to Buy a Home in Scottsdale?
Shopping for a mortgage loan probably isn’t on your “Most Fun Things to Do” list, but if you’re a qualified veteran or surviving dependent, you may be able to use your VA loan benefit. Here’s what you need to know about using a VA loan to buy a home in Scottsdale.
What is a VA Loan?
A VA loan is a loan backed by the Department of Veterans Affairs. When a loan is backed by the VA, it means that the VA guarantees up to a certain amount. The loan comes from a private lender, not the U.S. government, but the VA guarantees that the lender will not lose its money if it lets you borrow the cash to buy a home. Essentially, that VA backing guarantees that the lender takes on less risk of losing its investment, so lenders are generally more flexible in allowing people to borrow using these types of loans.
Benefits of VA Loans
VA loans come with several benefits that conventional loans – those not backed by the government – just don’t have. The biggest benefit, however, is that you can purchase a home with nothing down by using a VA loan. In fact, about 90 percent of all VA-backed loans are made to people with no down payment.
VA loans also offer:
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Limits on the amount of closing costs your lender can charge you
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The ability for the seller to pay your closing costs
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No minimum credit limit (although some lenders may still have minimums)
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A “full picture” requirement that requires lenders to look at more than simply your credit score when making a lending decision; lenders must look at your whole financial situation instead
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A higher debt-to-income ratio
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No early payoff penalty
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No private mortgage insurance (lenders are not allowed to make you pay for PMI when you use a VA loan)
Who is Eligible for a VA loan?
VA loans are available to honorably discharged veterans, current service members and some qualified survivors. If you’re eligible, you need a Certificate of Eligibility from the VA. Then, you’ll take your COE to your lender. Your lender will help you find the best loan product for your needs.
