VA Loans Versus FHA Loans
VA Loans are limited to those people who have served or are currently serving in the U.S. Military. Those who do not meet the qualifying criteria for a VA Loan, such as those dishonorably discharged or who have not had any military affiliation should definitely consider an FHA backing. Like the VA funding, it is not a ‘hand-out’ which oftentimes prevents people from even looking at FHA money. Some of the advantages of an FHA Loan over a conventional loan are:
- A much lower down payment. Most conventional loans will require from 10-20% down. An FHA-loan currently requires only about 3% down.
- Qualifying standards are not as stringent as conventional loans; therefore your chances of qualifying are much higher.
- FHA has numerous government programs at its disposal, such as for buying rural or farm property and for low-income potential home owners.
- Closing costs are much lower than those with a conventional loan and in many cases can be included in the loan, meaning fewer upfront costs.
- Mortgage counseling is available and is HUD-approved.
- VA Loans only secure half of the mortgage, while FHA-loans secure more than half and up to the entire mortgage loan.
- Lower interest rates not only lower your monthly mortgage payment but save you considerable money over the life of the loan.
In short, if you qualify for a VA Loan, there is no reason not to go that route. But if you do not qualify, then research your FHA options. This can be as simple as letting your realtor know that you are looking for an FHA loan. The advantages over a conventional loan are well-worth it!
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Article Submitted On: May 25, 2010
This is the one I meant to share: Charlotte FHA Loans