VA Questions and Tips - BRAC - Aberdeen Maryland - FREE Preapproval Pre-Approval

VA Questions and Tips - BRAC - Aberdeen Maryland

What is a VA loan?

VA loan provide veterans and active military personnel with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families.

Who can qualify for a VA loan?

• Current Active Military with certain time requirements
• Veterans with certain time requirement and not dishonarably discharged
• Surviving spouse of a veteran who died while on active duty or as a result of a service-related injury
• National Guard with certain time requirements.

How can I find out my VA entitlement?

The contact information for the Winston-Salem Eligibility Center is:

VA Eligibility Center VA Eligibility Center

P.O. Box 20729 251 North Main Street

Winston-Salem, NC 27120 Winston-Salem, NC 27155

Toll Free Telephone Number: (888) 244-6711

How Much Do I Need for a Down Payment?

As little as 0% down for, depending on your entitlement and the purchase price.

All VA loans have a VA Funding Fee, which is required by law. The fee depends on the category you fall into and can be financed into the loan.

What About Closing Costs?

Closing costs cover the amount of money you pay to close a mortgage loan aside from the down payment. The amount you pay in closing costs varies among lenders, mortgage products and localities. Closing costs can be paid through seller assistance, also known as seller concessions. The closing cost fees generally fall into one of three categories: out-of-pocket expenses, pre-paid items and points.

Out-of-pocket expenses usually cover third-party services that are directly charged to you, such as fees for appraisals, attorney fees, credit reports, title (deed recording), or tax services. Which services you must pay for varies on the property location and home financing program. If you don't understand what a particular fee covers, or why you are required to pay it, ask your home mortgage consultant to explain.

Prepaid items can vary based on the type of property and the time of the closing, but they generally include homeowner's insurance, mortgage insurance, and fees associated with establishing an escrow account. Escrow accounts are set up by lenders to pay property tax and insurance premiums. Instead of paying the entire premium every six or twelve months, the borrower pays a portion of the cost along with every monthly mortgage payment. This helps the borrower avoid the hassle of planning for the large payments, while reassuring the lender that tax and insurance payments are always up to date.

Points are fees, with each point representing 1% of your loan amount, that cover the cost of your mortgage loan. Generally, points can be split into two categories:

• Origination points: This is an amount collected by the lender for making the loan.

• Discount points: As discussed elsewhere in this handbook, this is a fee that allows you to buy down your interest rate. In other words, in return for paying more discount points upfront, you can lower your interest rate and thus your monthly payment.

To make the best apples-to-apples comparison on lenders and home financing packages, be sure that the rates all have the same number of total points and that you factor in the total amount you will be paying in closing costs. While one loan may offer a lower rate, it may also require you to pay a higher number of points at closing and more money out of pocket for you. Also, don't forget to consider loan features and service after closing in addition to the rate, APR, and points when you compare different loan programs.

Your home mortgage consultant can give you information on average closing cost percentages for specific areas and loan programs. And, shortly after you apply for a home mortgage, you will be sent a Good Faith Estimate, which provides details on the approximate costs you will be required to pay at or before closing. While it is only an estimate, it can help you budget for your closing.

Is there closing cost assistance?

VA allows up to 4% seller concessions. This is when the seller agrees to help you with closing costs. Many sellers are willing to do this in today's market. If the contract is properly drawn up, it is possible that the buyer has to pay nothing out of pocket except for appriasal and optional inspections, which range in price, but are usually less than $1,000.

How Important Is Pre-approval?

Before you begin searching for a home, it is highly recommend you ask your home mortgage consultant about pre-approval. By completing your mortgage application prior to choosing a home, you can get a pre-approval letter that lets you know how much home you can afford. Getting this pre-approval letter is a smart move because it lets you know exactly how much you can spend, and shows prospective sellers and real estate agents that you're a serious buyer.

In addition, many sellers will require a pre-approval letter prior to reviewing an offer.

What do I qualify for?

For a FREE Pre-Approval, feel free to contact:

Bob Lowery

Prosperity Mortgage

8712 Bel Air Rd

Baltimore, MD 21236

Office: (410) 248-1762

Cell: (443) 653-1720

Email: Bob.Lowery@prosperitymortgage.com