Differences Between A FHA & VA Loan?
After you have chosen the best Mortgage Broker to help you as you apply for a home loan – either a new loan or refinancing an existing loan, you will need to discuss different types of loan programs available. Two popular loan programs are from the Federal Housing Administration (FHA) and the Department of Veterans Affairs (VA).
Remember, a Mortgage Broker is your single point of contact and advocate to multiple lenders and loan programs. The Mortgage Broker has a vested interest in seeing that you get the best home loan for your situation.
FHA loans are loans that are made in conformance with guidelines set by the Federal Housing Administration. Historically, they allow for slightly more liberal underwriting guidelines and lower down payments.
The FHA guarantees that if the loan is not repaid, then the FHA will pay the lender a certain amount of the loan to help them cover their loss. The minimum down payment for an FHA loan is 3.5%.
A VA loan is a loan that is guaranteed by the Veteran’s Administration. Veterans who have served the country honorably are usually eligible for VA loans.
The VA loan program is designed to help veterans purchase a home when they might not have been able to save for the down payment.
One of the unique features of the VA loan is that it requires no down payment (0)% by the veteran.
When you work with a Mortgage Broker, they will help you understand the various loan programs available to you and help you choose the best loan program for your situation.
