Unique Attributes of VA Mortgages:
VA mortgages are allowed for up to 100% of the appraised value or the purchase price, whichever is less, limited only by buyer qualification and the VA loan limit (see previous page). The funding fee, which may be included in the loan amount, does not need to be accounted for in the appraised value.
Private mortgage insurance is not required with a VA mortgage.
VA's mandate includes serving veterans as a "special class of citizen." The guidelines of the VA mortgage program are setup to serve this mandate by providing zero down financing in a way not available to other borrowers. Please talk with your mortgage consultant to learn how you can be approved for a VA mortgage.
Range of Solutions
The solutions are pretty clear cut with zero down financing, but there are few twists you might want to explore with your mortgage consultant and Realtor.
First, you can ask that your closing costs be priced into the interest rate - also called premium pricing closing costs. Rather than paying closing costs out of pocket, you price your costs into the rate. This is a great way to buy a home with a VA mortgage without putting any money into the transaction other than your earnest money, some or all of which may be refunded to you at closing.
You can also talk with your Realtor about negotiating to have the seller pay for your closing costs. The results can be identical to the premium priced solution above, without paying a higher interest rate.
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