The United States Department of Veterans Affairs has established the program, VA home loan, to thank the veterans for their unparalleled sacrifices. The loan products help the active service members, disabled service members, veterans, and their surviving spouses to achieve homeownership. Currently, the loan options have become widely popular due to no zero down payment benefit along with low credit score requirements. The loan terms are also quite generous in comparison to other federal home loan products available in the market. However, the veterans are often unknown to the fact about the different VA loans.
The VA loans do not need down payment and there is no PMI, either. Certain limits are depending on where you live. For instance, if you are willing to purchase a single-family residence in Houston, the loan limit is $484,350.00 while ensuring zero down payments. The mortgage seems to be a lucrative option for first-time homebuyers but it is not a bad idea when willing to buy another house. The credits scores are unbelievably low because you can get away with 550 credit scores. Also, the VA provides several types of mortgages to help the veterans and their families financially. For finding out the best VA loans for bad credit in Houston, you should take a look below.
VA Purchase Loan
This type is designed to allow the qualifying veterans and the surviving spouses to purchase a house at a very competitive rate. As earlier said, the VA purchase loan does not ask for private mortgage insurance and down payment. On the contrary, FHA loans have an annual and upfront home loan insurance charge and the conventional borrowers pay for PMI after putting down less than 20%. The lower interest rate than the average might be another important benefit of the home loan.
Interest rate reduction refinance loan or IRRRL is widely known as a VA streamline refinance. Unlike the VA purchase loan, the borrowers need not submit income proof. Furthermore, the buyers also need not get an appraisal. Here, the bowers can get a visibly low-interest rate only by financing the current VA loan, and this makes it a VA loan-to-VA loan procedure even allowing the borrowers to convert an ARM to a fixed-rate mortgage. This option is easier to discover than a VA purchase loan and saves a lot of time by reducing the paperwork, too.
VA Cash-Out Refinance Loans
This loan product permits the borrower access 100% of the home’s equity. From paying off the credit debt to recharging the savings account for a future purchase, the loan is a perfect solution. Moreover, the borrowing power is higher than FHA loans because FHA only offers 85% of the home’s equity.
Now, VA also offers housing grants to help Native American veterans to finance the construction of a new home or do home improvements. The housing grants for the service-connected disability are also available in the market. If you are a veteran under special circumstances, you should discuss the matter for choosing the best VA loan.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.