You have decided to live off base. Now how are you going to finance that new home? A VA loan seems to be a logical choice... But not always.
This article is part of "The Patrick AFB Online Relocation Package".
Here are some of the advantages of a VA Loan:
- No downpayment is required
- No monthly mortgage insurance premium to pay
- There is a limitation on your closing costs
- 30 year loans with a choice of payment plans
- Traditional Fixed Payments
- GPM (low initial payments slowly rising to a level payment in the sixth year)
- GEM (slowly increasing payments, with the increase applied to principal - faster payoff)
- Hybrid ARMs
- Traditional ARMs
- VA Loans are assumable
- No prepayment penalty
What can a VA loan be used for:
- Purchase and existing home (house, condo, townhouse)
- To build a home
- To buy and improve a home at the same time
- To by a manufactured home and/or lot
If you have used your VA entitlement before, you can use it again; you may have some "remaining" entitlement left to use for another VA loan or if your previous VA loan has been paid off or been assumed, you can have your entitlement restored. Currently the maximum amount for a VA loan is $417,000.
Costs of a VA loan:
- A funding fee must be paid by all Veterans
- The funding fee is anywhere from 1.25% up to 3.3% depending on how much you put down and how often you have used your VA entitlement. You can "roll" your VA funding fee into your loan.
These are other closing costs that may be charged but not "rolled" into the loan:
- VA appraisal
- Credit report
- Loan origination fee
- Discount points
- Title search and title insurance
- Recording Fees
- Sate and local transfer taxes
Remember the VA does not make loans, they only guarantee them.
There is another great way to finance your home in Florida. Through Florida Housing, there is a program called the "Florida Heroes" program available to all active and honorably discharged veterans. This is part of the first time homebuyers program. But the "first time homebuyer" provision has been waived in Brevard County until 2010. So any veteran can qualify, even if they are not a first time homebuyer.
These are conventional 30 and 40 year fixed rate loans with low interest rates.
You can check out the current rates here. These rates are typically lower than the rate you could get on a regular fixed rate loan.
On top of that, there is downpayment and closing cost assistance up to $10,000 for lower incomes and up to $5000 for moderate incomes.
There are income limits to qualify for the program.
The purchase price limit for the entire program is $320,375.
Income limits to qualify for the program:
1 to 2 in household
3 or more
In addition, to qualify for up to $10,000 closing and down payment assistance, there are additional income limits based on the number of people in the household. The $10,000 is a 0% percent non amortizing second loan that you pay off when you sell the home:
Income Limits for the up to $10,000 assistance:
If you don't qualify for the up to $10,000, there is the up to $5,000 in closing cost and downpayment assistance available in a amortizing second mortgage at 5%.
Documents You Will Need For Your Loan:
1. The most recent 2 months of you LES.
2. Your most recent 3 months of bank statements.
3. Your last 2 years of W-2's.
4. Your last 2 months of any borkerage accounts, money markets, mutual funds, etc.
5. Bankruptcy or divorce papers, if applicable.
At AmericanAirmanHomes.com we have a mortgage specialist with a lot of experience in both programs that can guide you in what program might be best for your situation. Please contact us to find out more.
John S Murphy is a full-time REALTOR® with RE/MAX Elite in Melbourne, FL. He is also the creator of www.AmericanAirmanhomes.com, a website that specializes in PCS, DOD, and Civilian relocations to Patrick Air Force Base, FL. --- Doing a home search? Visit his website and search the entire Brevard County MLS.
John S Murphy
Certified Distressed Property Expert