VA-guaranteed loans are mortgages administered by The Veteran's Administration to those men and women who have or are serving in the military. With this type of loan, borrowers can finance up to 100 percent of the value of their home. In most cases, there is no down payment required, and the interest rate is generally less than those for conventional loans. Obtaining mortgage insurance is also not necessary, since the Veterans Administration guarantees the loan. However, the maximum amount you can borrow is capped at $203,000 (two hundred and three thousand dollars), and the home must be a primary residence, not an investment property. Be aware that VA-guaranteed mortgages require an initial funding fee, usually between 2 to 3 percent of the price of the loan. You can wrap this fee into the loan, but you increase your principal balance, and thus your total interest costs. Some states allow VA loans to be used for refinancing, home improvement projects, and mobile home purchases. If you're interested in obtaining a VA loan, first contact your VA regional office to find out if you're qualified and to obtain a Certificate of Eligibility. You must present this certificate when applying for a VA loan with any mortgage lender that participates in the VA home loan program. Generally, the average time necessary to approve your credit and close on VA loans is longer than conventional or FHA (F-H-A) mortgage processing. Veterans who've obtained a VA loan before may still qualify for another VA loan, but your eligibility is renewed depending on the circumstances. For example, if you've paid off your prior VA loan and sold your home, you can have your eligibility restored for additional use. Also, on a one-time only basis, you may have your eligibility restored if your prior VA loan has been paid in full but you still own the property. In either case, to restore your eligibility, you must send the Veterans Administration a completed VA Form 26-1880 (26-18-80).
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