What Are the Types of VA Home Loans Available for Veterans?

VA Guaranteed Home Loan Program The VA guaranteed home loan program has helped millions of veterans and active duty service people to achieve home ownership at affordable interest rates. The program does not provide the mortgage money, but they guarantee payment for the lender, which mean lenders can always be assured they will be repaid for the loan. The program offers a number of options for VA loans in Arizona to serve a variety of mortgage needs.

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First Time Home Loans The VA program guarantees home loans for eligible buyers without a down payment. However, you must provide documentation of your military service and have a good credit record to fulfill the loan requirements. Applicants for these loans must intend to live in the home they are purchasing.

Fixed Rate Property Mortgages The VA guarantees fixed rate home loans from lenders that provide the stability of a set, regular payment each month. Although interest rates for fixed rate mortgages are slightly higher than those for adjustable mortgages, many people find that knowing their payment amount will remain the same for the life of the loan is worth the extra cost.

Versatile Rate Residence Mortgages The VA also guarantees adjustable rate mortgages that vary with the normal fluctuations in the lending marketplace. For the first few years, adjustable rate mortgages may be several points below fixed rate mortgages. These loans then increase after the initial period, generally staying within the “cap” amount stated in the mortgage. These loans are beneficial for individuals who prefer a lower mortgage payment in the early years who expect their income to rise in future years.

Hybrid Adjustable Rate Mortgages Hybrid adjustable mortgages loans are fixed for the first 3 to 5 years, and then adjust annually in following years. The amount that the interest rate can raise over the course of the loan is set at a certain ceiling figure. Individuals who expect to be in the home for a short amount of time often prefer this type of loan.

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Jumbo Loans The VA guaranteed home loan program also offers jumbo loans for vets for purchases of more expensive properties. However, the VA guaranteed home loan program sets certain limits on these loans, based on prices in various counties in the United States. No down payment may be required for the loan up to this limit, but the applicant must pay 25 percent down payment on any amount above the country limit.

Interest Rate Reduction Refinance Loans If interest rates have fallen since you have purchased your home, you can refinance the property through a VA streamlined process to get a lower interest rate. The Interest Rate Reduction Refinance Loan, or IRRRL, requires minimal documentation, no credit check and no appraisal of the property. Funding fees for these loans are very low to help homeowners make their mortgage more affordable. However, the money cannot be used to pay off a second mortgage.

Cash Out Refinance Loans Homeowners who have equity in their properties and wish to take cash out can utilize the Cash-Out Refinance Program offered by the VA. This type of loan can be helpful for homeowners who have two mortgages and wish to consolidate them into a single loan. Most lenders allow up to 100 percent of the home value for the loan amount.