*VA Loan Changes Coming Jan. 2020*
Guild Mortgage Specialzes in VA Mortgages in Michigan
You’ve served your country. Now let Guild Mortgage Guild Mortgage’s Michigan teams serve you in financing a new home or refinancing an existing mortgage. From Grand Rapids to Detroit, we help veterans access VA mortgage loans and their inherent benefits. Whether you want a streamlined Interest Rate Reduction Refinance Loan (IRRL) or to purchase a New Home or Refinance to free up cash, we will help you navigate the process.
What is a VA New Purchase or CashOut Refinance Mortgage Loan?
A VA mortgage loan is a federally guaranteed mortgage loan for veterans that does not require a down payment or private mortgage insurance. This is an excellent benefit for eligible veterans. Private mortgage insurance is usually required if a down payment of 20% is not provided – with the VA mortgage loan both the down payment and private mortgage insurance requirements are waived for veterans.
Which Veterans are Eligible?
Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime are eligible to apply for the VA Mortgage Loan. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National Guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.
VA Home Loan Advantages
The guarantee VA provides to lenders allows them to provide you with more favorable terms, including:
- No down payment as long as the sales price doesn’t exceed the appraised value.
- No private mortgage insurance premium requirement.
- VA rules limit the amount you can be charged for closing costs.
- Closing costs may be paid by the seller.
- The lender can’t charge you a penalty fee if you pay the loan off early.
- VA may be able to provide you some assistance if you run into difficulty making payments.
You should also know that:
- You don’t have to be a first-time homebuyer.
- You can reuse the benefit.
- VA-backed loans are assumable, as long as the person assuming the loan qualifies.
All veterans must qualify for the VA mortgage loan – they are not automatically eligible for the program. The guaranty means the lender is protected against loss if you or a later owner fails to repay the VA mortgage loan. Contact us to discuss your VA Mortgage Loan options.
Interest Rate Reduction Refinance Loan
The VA Interest Rate Reduction Refinance Loan (IRRRL) lowers your interest rate by refinancing your existing VA home loan. By obtaining a lower interest rate, your monthly mortgage payment should decrease. You can also refinance an adjustable rate mortgage (ARM) into a fixed rate mortgage.
- No appraisal or credit underwriting package is required when applying for an IRRRL.
- An IRRRL may be done with “no money out of pocket” by including all costs in the new loan or by making the new loan at an interest rate high enough to enable the lender to pay the costs.
- When refinancing from an existing VA ARM loan to a fixed rate loan, the interest rate may increase.
- No lender is required to give you an IRRRL, however, any VA lender of your choosing may process your application for an IRRRL.
- Veterans are strongly urged to contact several lenders because terms may vary.
- You may NOT receive any cash from the loan proceeds.
An IRRRL can only be made to refinance a property on which you have already used your VA loan eligibility. It must be a VA to VA refinance, and it will reuse the entitlement you originally used.