Mortgage Loan Guide
The Department of Veterans Affairs (VA) first started to give out loans in 1944 to war veterans to help them purchase their own homes. Since then, the VA has given more than 18 million loan guaranties.
The people who are eligible for VA mortgage loans are the veterans who were in honorable and active service during World War II and all the conflicts thereafter. To be eligible, one has to have served at least 90 days of service. Those veterans who serve during peacetime periods are eligible only if they have had more than 180 days of active service.
Contrary to what most people believe, securing VA mortgage loans is relatively easy, and it is quite similar to getting normal mortgages. There are five steps to this process. First, you need to apply for a certificate of eligibility. When submitting this form to the eligibility center, make sure you include a proof of military service. Second, you have to choose a home. Third thing to do, though this is usually done by the lender, is to order an appraisal from the VA. The fourth step is to apply for a loan with a lender. When this is being done, the lender may check for your credit information. And the fifth and final step requires you to close the loan.
There are several advantages of taking VA mortgage loans, one of which is that you don’t have to pay a down payment. Another advantage is that you can get the maximum amount equal to 100% of the appraised value of the property. There is also flexibility in VA mortgage loans since you can negotiate interest rates. The terms for this type of loan can reach up to thirty years and you can even choose the mode of payment you wish. One good feature about this loan is that when you are faced with temporary financial difficulties, you have the option to take on personal loans to avoid losing your home. When you get approved for a VA mortgage loan, you can use the loan proceeds to build, buy, improve, or refinance a home.
To ensure approval of VA mortgage loans, make sure that you are an entitled veteran and the loan is for an eligible purpose. Also, you have to be certain that you will stay in the property for a long time after the loan has been approved. You will also need to have a good credit standing and your income must show that you are financially capable of repaying the loan. If you satisfy these requirements, then you can be quite sure that your application will be approved.
When you are financially strapped down, with little cash on hand and your credit card is maxed out, what is the first thing that comes to mind? Yes, borrow money. But what happens when you do not want to bother your neighbors or friends with your financial difficulties? You run to banks for loans.
Second mortgage loans are loans that can be a solution to your dilemma. Such a loan is called second mortgage because it is basically another mortgage on your home or any other property. The terms of second mortgage loans also imply that they do not have priority in case you cannot pay them. In this case, payment will be made to your first mortgage before any of it reaches the second mortgage.
An advantage of second mortgage loans is that you will be able to get bigger loans. This is so since lenders consider loans against a home to be safer. Once you have the loaned amount, you can actually use it for a variety of purposes. You may use it for home improvement, to pay off debts or even purchase additional homes, yet it does not stop there since you are the one who is in control of how your money should be spent.
Getting second mortgage loans also has its disadvantages. One major disadvantage would be the risk on your home. Always think of this risk before getting second mortgage loans. Another disadvantage is that this type of loan has a slightly higher interest rate. In the event that you cannot pay this loan and you have a lien mortgage, it is the lien mortgage that gets paid first. Third disadvantage will be the fees associated with this type of loan. When getting a second mortgage loan, you have to understand the terms and conditions thoroughly so that you won’t confuse yourself with the fees associated with this type of loan, which can be rather high depending on which company you are getting the loan from.
Finding companies that offer second mortgage loans is easy. You can work with the company that holds your primary mortgage to save money and effort, since it already has your record and it knows how well you pay your loans. Yet, if you prefer another company to handle your second mortgage, there are a lot of companies that offer second mortgage loans, such as banks and credit institutions.
Before taking on a second mortgage, think about its advantages and disadvantages and weigh your options. Do not forget that this is another mortgage against your home. Also, consider other options that are available to help you solve your money worries since the money from second mortgage loans is actually a risk you take on your home.
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