Veterans, active-duty services members and widowed military spouses can use a VA loan to buy a home in Utah, and with the many advantages – including no down payment, relaxed eligibility requirements and lower closing costs — a mortgage guaranteed by the U.S. Department of Veterans Affairs can be the best option.
But while the VA home loan program is widely considered to be one of the greatest deals in the mortgage industry, would-be Utah homebuyers do need to be aware of the potential disadvantages.
Property Restrictions
The types of property that can be purchased with a VA home loan are limited. The program is designed to offer housing assistance to those in need, and a borrower can only choose this form of financing for their primary residence. Anyone who wants to buy a vacation home or investment property in Utah needs a conventional mortgage.
VA Funding Fee
Borrowers don’t pay for mortgage insurance with a VA loan, but there is an upfront charge to consider. For a first-time homebuyer with no down payment, the VA funding fee amounts to 2.15 percent of the mortgage total, but it can be as much as 3.6 percent for repeat borrowers. Fortunately, the fee can be rolled into a home loan.
Seller Resistance
Several myths about VA loans are out there, and not all home sellers in Utah are receptive to offers with this type of financing. Some believe that getting an appraisal is a nightmare or that all the red tape delays closing, but the VA has actually streamlined the borrowing process. In any case, working with a mortgage professional can help.
Is a VA Loan the Right Choice for You?
Despite the potential drawbacks mentioned above, VA financing is still an excellent option for those who are eligible. With a VA home loan, you won’t need a down payment, and you won’t have to worry about private mortgage insurance. A perfect credit report isn’t required, and lenders tend to be flexible in regards to debt-to-income (DTI) ratio. Plus, compared to other forms of financing, VA home loans feature lower closing costs.
Is a VA loan the right choice for everyone who qualifies? No – but it is worth considering. Discussing your unique circumstances with a mortgage professional who is well-versed and well-practiced in VA financing is the best approach, and the team here at Intercap Lending would be happy to talk the matter over.
Intercap Lending, a preferred local mortgage company, is committed to helping people achieve their home financing goals. For more on VA loans, contact our office in Orem, Utah, today!