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Ask Karen

“I have my VA Benefit for home financing. Why would I use this option to buy?”

This financing can be an excellent choice for qualified veterans… probably the only zero down payment mortgage left. There is no monthly mortgage insurance, only a one-time “funding fee,” usually rolled into the new mortgage.

Eligibility is determined by when and how long a veteran has served. I suggest you meet personally with a lender recommended to you, with several years’ experience in VA lending. Home financing can be complicated and often confusing.

The VA does not set a maximum loan amount, but limits the amount it will guarantee; this varies by county locations and their median home prices. However, a person can get a loan above the maximum with a combination of their guaranty plus a down payment to equal 25%. This method also applies when a veteran only has a partial remaining eligibility and wishes to purchase with a VA loan again (often veterans do not know they may use their entitlement more than once). Full entitlement is not always needed, though any previously used can be restored when the home with the original VA loan was sold or the loan was assumed by another buyer.

Other advantages? ~VA guidelines are very liberal in what is allowed for seller contributions for closing costs and quite restrictive on what can be charged to the veteran. ~You do not have to be a first-time homebuyer. ~It is one of the rare fixed-rate loans that can be later assumed by a qualified buyer, with full release of liability for the original mortgagor. ~VA loans also have a “streamline refinance” feature, allowing borrowers to refinance into a lower rate, often with no appraisal (a big help if owner is “under water” in value versus debt). ~ Qualifying guidelines are generous. Good luck.

Karen Davis NMLS #245892 is regional vice president of The Mortgage House, Inc. She has over 36 years’ experience in the mortgage banking industry. Your e-mailed questions are welcomed through her website at: or call her at 1-800-305-9731.

This article is a forum to explore real estate principles. It is not intended to provide tax, legal, insurance or investment advice and should not be relied upon for any of these purposes.