Wednesday, October 14, 2009
What is a VA Loan?
VA loans are offered to active and retired military personnel.
There are some very significant benefits to these loans and should be considered for people buying condos in the Hoboken and Jersey City real estate markets.
What Are the Benefits of a VA Loan?
100% financing, no down payment loans are common.
No Private Mortgage Insurance (PMI).
No penalties if you prepay the loan.
Competitive interest rates.
Loan qualification is sometimes easier than if you were applying for a conventional loan.
Sellers can pay all closing costs.
What Are the Negatives of a VA Loan?
VA loans made prior to March 1, 1988, can be assumed with no qualifying of the new buyer. If a buyer of such a property defaults, the veteran homeowner may be liable for funds.
Some sellers may be hesitant to work with someone who is acquiring a VA loan because of their past reputation of taking longer to process than conventional loans. While the time may still be a little longer, getting a VA loan is not the lengthy ordeal it once was.
Sellers are often asked to pay a portion of closing costs, so they may not be eager to negotiate the sales price of the home.
The Veterans Administration Web site is an excellent resource for detailed information about VA guaranteed home loans. If you cannot find the answers to all of your questions there, be sure to contact your local or regional VA office.
A building must be approved by the VA in order to qualify for these loans. You must have a recorded copy of the master deed and bylaws and there are a few simple forms that the building needs to complete.
The VA website allows you to verify which buildings in Hoboken and Jersey City are already qualified: