How Does a VA Loan Compare to Other Loans?
Karene Garlich-Loman
Karene, a seasoned real estate professional with two decades of experience, is a true industry luminary...
Karene, a seasoned real estate professional with two decades of experience, is a true industry luminary...
When it comes to buying a house, there are different options for financing. A buyer has the option to pay for cash or getting pre-approved for a loan.
If a buyer is looking to use a loan for the home, there are also choices in which one to choose.
U.S. Department of Veterans Affairs Federal Housing Administration Loan
A VA loan is a Veteran's loan and is only offered to active military members, veterans, and their immediate families. With a VA loan, a buyer doesn't have to put anything as a down payment. You read that right... $0 down payment. Another benefit to the VA loan is that while the down payment is less than 20% (like the FHA loan), it won't require PMI. The VA loan was created in 1944 to helps members transition out of military service and to provide current military families a chance to own a home.
Thank you veterans for your service! We would love to guide you in the home buying process!
How does a VA loan compare to other loans?
Conventional Loan
A conventional loan is the most common type of loan. A buyer will put can put between 5% or more of the purchase price towards a down payment. For example, if the house is being purchased for $400,000, the 5% down payment would be $20,000. The other 95% of the purchase price will be financed with the conventional loan. If the down payment is less than 20%, it requires PMI (Private Mortgage Insurance). A buyer will pay for monthly PMI to protect the lender incase the buyer doesn't follow through on their monthly mortgage payments. A lower down payment will result in a higher monthly mortgage payment because a higher amount of the purchase price will be financed with the loan. With the higher monthly payments it's important to protect the lender.
Federal Housing Administration Loan
An FHA loan is for first time homebuyers. A buyer will put 3.5% of the purchase price towards a down payment. If the house is being purchased for $400,000, the down payment would be $14,000. The other 96.5% of the purchase price will be financed with a loan. Because an FHA loan down payment is less than 20% and the buyers are first time homeowners, it also requires PMI (Private Mortgage Insurance) to protect the lender.
Meet Robyn (aka Karene's twin sister)
First, meet with Robyn Garlich-Baird to get pre-approved. We can help you determine your buying price range with confidence. Be prepared to dig into paperwork during this part of the process such as pay stubs, W2’s, and tax returns. I will do a full review and then tell you what you will be able to borrow in order to purchase a home. This is a vital step in the home buying process!
Second, get your ideal mortgage loan to help you afford a home.
My mortgage process is simple and streamlines - the way it should be!
"Robyn was extremely helpful with completing my loan and it was much easier than expected. I was always in the loop about everything and it all went better than planned." ~Marla N.
If you're a veteran, we've put together a list of places you can visit to enjoy complimentary treats around town: