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Pros
- No down payment
- No limitation on size of mortgage
- Loan rates typically below market value
- Seller can assist buyer in paying closing costs
- A Veteran can own more than one VA property
- Loans before March 1, 1988 are simply assumable
- No prepayment penalty
- No mortgage insurance charged
- High qualifying ratio - 41%
Cons
- Borrower must be a Veteran and meet eligibility guidelines
- Loans after March 1, 1988 are not simply assumable, VA must approve
with an assumption fee
- In case of default, the Veteran may be liable to the VA
- Loan processing may take longer
- Seller may be requested to pay fairly heavy costs to assist buyer,
seller may want to sell at full price
- A funding fee is charged and must be paid at closing
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