VA loans are arguably the best mortgage product available because they require zero down payment, have no monthly mortgage insurance, and offer competitive interest rates. The VA does not lend money directly—private lenders originate VA loans and the VA guarantees a portion of the loan. VA loans require a funding fee (ranging from 1.25% to 3.3% depending on down payment and prior use) which can be financed into the loan. Disabled veterans may be exempt from the funding fee. VA loans require a Certificate of Eligibility (COE).
A veteran with 20 years of service purchases a $400,000 home using a VA loan with zero down payment and no PMI. The VA funding fee of 2.15% ($8,600) is financed into the loan. The veteran's monthly payment includes only principal, interest, taxes, and insurance—no mortgage insurance premium.
Key VA exam facts: NO down payment required, NO monthly mortgage insurance, funding fee required (but disabled vets may be exempt), the VA guarantees but does NOT lend, and only eligible veterans/active military/surviving spouses qualify. A Certificate of Eligibility (COE) is required.
Related Terms
Related Concepts
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
A conventional loan is a mortgage that is not insured or guaranteed by a government agency such as the FHA, VA, or USDA. It is originated and funded by private lenders and may be conforming or non-conforming.
An FHA loan is a mortgage insured by the Federal Housing Administration that allows lower down payments and credit scores than conventional loans. It is designed to help first-time homebuyers and borrowers with limited resources.
Frequently Asked Questions
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