A FHA mortgage loan is guaranteed by the federal government. A VA loan, however, is backed by the Department of Veterans Affairs against default rather than the Federal Housing Administration.

VA loans are only open to qualified veterans. To be eligible, you must be an eligible veteran, your credit history for the last 12 months is critical, no late payments on any account. While there are some restrictions on who can qualify for a VA loan, they are not strictly limited to people who have served in the army. Reservists or National Guard are eligible for VA loans. Disable remarried spouses of veterans who died as a result of service or service-related injuries may also qualify for VA loans. In addition, American citizens who served in the armed forces of an ally of the United States during World War II is likely to benefit (so that their spouses may).

VA loans offer many more advantages than FHA loans. For example, competitive interest rates, prepay the mortgage without penalty. VA loans are assumable, meaning that veterans can sell their homes to veterans and allow the buyer the advantages of a VA loan. A VA loan will allow a higher debt ratio when qualifying. The maximum loan amount is $ 417000, To determine eligibility, it will be important for you to have your military discharge papers, the DD form 214. It's true if you were Active Duty, or a member of the National Guard.

Advantages of a VA loan include: Interest Rate negotiable. Closure of comparable cost, and sometimes lower than other types of financing. No private mortgage insurance requirement. Right to loans without prepayment penalties Mortgages can be taken over (or "assumed") by the buyer when a house is sold. advice and assistance available to veterans borrowers with financial difficulties or default on their loans.

Although the mortgage insurance is not required, the VA charges finance fees to issue a guarantee to a lender against a borrower default on a mortgage. Fees can be paid in cash by the buyer or seller, or it can be funded in the amount of the loan.

A VA mortgage loan can be used to buy a house, build a house, and even improve a home with features energy savings such as solar energy or heating and cooling systems, water heaters, insulation, weather stripping / caulking, storm windows / doors or other energy efficiency improvements approved by the lender and VA.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A certificate of eligibility from the VA is to be presented to the lender to qualify for the loan.