HR 299 is a new VA Bill recently signed by the president that makes some big changes to VA financing. If you’re thinking about buying a house and you’re an eligible VA mortgage applicant. Here are some things you ought to consider..
VA financing allows you to purchase a house with no money down. Presently this is permitted up to the maximum conforming loan limit in the area in which the county is located. Technically the VA does not have a limit, but it does if you exceed the maximum high balance loan limit in the area in which the property is located and then you have to come up with a 25% coverage ratio meaning you have to put in your own cash to purchase the property when it exceeds the maximum high balance loan limit.
This new bill that starts for all qualified VA applicants in January 2020 removes that high balance loan limit cap for 100% financing opening the door for more eligible veterans and their families to pursue homeownership.
The VA loan is particularly attractive because of the following things
- Interest rates are generally lower when stacked up against FHA and or conventional mortgages
- The loan is guaranteed by the Department of Veterans Affairs making the loan less risky to the lender allowing the lender to push the ratio in terms of qualifying ability. Note this is on a case-by-case basis with each lender
- The loan allows for no money down at all. Couple that with a seller credit for closing costs and you can purchase a primary home without putting in any of your own funds
- Loan also allows for no monthly mortgage insurance which is incredibly huge $300- $400 a month of PMI for example when stacked up against an FHA or conventional loan can really improve borrowing power.
If you’re thinking about VA financing or looking to get a jump start on your eligibility prior to January talk to a qualified lender now who can best position you to be pre-approved in January.
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