When you are knowledgeable on the type of mortgage loan that you have you can save yourself money automatically. If you have an FHA loan, and your equity in the home is 80% or more you should look at refinancing the loan to take away the Mortgage Insurance costs. FHA loans require that Mortgage Insurance for the life of the loan while most other mortgage programs allow the MI to disappear after you have built 80% equity in the home.
If you have taken a mortgage out through FHA and you currently have 80% or more equity in your home, you are wasting money on Mortgage Insurance every month. You may look into a conventional mortgage loan or if you are a Veteran you may want to look into a VA loan.
VA loans are government-backed loans that offer many economical advantages. VA loans are offered to U.S. military veterans, active duty military men or women, or those who have served at least six years in the military reserves. VA loans are headed up by the Department of Veteran Affairs, and in most cases offer a no down payment program. Over half a million veterans have taken advantage of VA loans.
VA loans offer great benefits like no down payment, easy qualifications, no closing costs, and NO MORTGAGE INSURANCE. VA loans offer financing up to $240,000 with no down payment and the range does not differ by location like FHA loans. When the price of your home exceeds the $240,000 mark you will then only be required to come up with 25% of the purchase price. If a Veteran’s credit is not in the greatest condition at the time, they want to purchase a home this too will not be a hindrance in qualifying for a VA loan. There are some cases where the total cost to move into a new home with a VA loan could be under the $100 mark.
The greatest benefit of a VA loan is that there is no Mortgage Insurance required. With VA there is only a one time fee of 2.5% to cover the entire amount of the loan. It is good to note that this 2.5% fee can also be added to the balance of the mortgage to keep from incurring any out of pocket expenses at closing. If you are a Veteran you should take advantage of the great home financing options that are available to you through the Department of Veteran Affairs.