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Many people have the misconception that VA Home Loans mean that the federal government is loaning money to veterans to purchase their own homes. In reality, a veteran home loan is one that is made by private lenders just like any other real estate loan. The difference between a regular loan and a VA Loan is that the VA Loan is guaranteed by the Department of Veteran Affairs (VA). The lender is protected against loss, up to the amount of the guarantee. A VA home loan also requires no down payment, and assures the borrower of favorable interest rates and contract terms.
Your VA loan can be used to buy or build a home, or repair or improve the home that you already own. You can also use the funds to purchase a residential condominium or a manufactured home – with or without a lot. You can also refinance an existing VA home loan to take advantage of more favorable interest rates or to make use of existing equity. With today's focus on global warming and the use of renewable energy sources, you can use your Veteran Home Loan to install a solar heating or cooling system or other weatherization improvements. In other words, you can use your VA loan just like any other home loan. What are the benefits of a VA Home Loan? When you apply for your Veterans Home Loan, you can be sure that: You will be given an equal opportunity to buy homes with VA assistance - without regard to race, color, religion, sex, handicap, familial status or national origin You will know the estimated reasonable value of the property You will pay no down payment (unless required by the lender, or the purchase price is more than the reasonable value of the property as determined by VA, or the loan is made with graduated payment features) You will receive a negotiable fixed interest rate competitive with conventional mortgage interest rates You will not be surprised by outrageous closing costs Your loan will be an assumable mortgage You will be able to get long repayment terms You can pay off your loan at any time without penalty You will have the backing of the VA for assistance if you are experiencing temporary financial difficulty.
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