Pennsylvania Mortgage News: VA Mortgages : If you have VA Benefits, you might as well use them

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VA Mortgages : If you have VA Benefits, you might as well use them

Whether buying a home or refinancing your current home, if you are a Veteran and are entitled to VA Benefits, you may want to consider the Pennsylvania VA Mortgage program. 

One of the main benefits of the VA Mortgage program is that there is No Mortgage Insurance requirement no matter how little equity there is in the property.

VA Mortgages offer 100% financing for both purchases and refinances.

Due to pressures created by mortgage defaults over the last several years, mortgage insurance premiums have increased drastically for FHA loans. Mortgage Insurance continues to be required for Conventional mortgages with less than 20% equity and even USDA has instituted a nominal annual fee that is included in the monthly payment.

For those seeking financing with less than 20% equity, VA Mortgages remain as the last available program to purchase or refinance and avoid monthly mortgage insurance.  For Veterans that are seeking the combination of lowest monthly payment with the least amount of cash due at closing for a purchase or the lowest equity requirement for a refinance, the VA Mortgage program can not be beat. 

Let's take a look at some scenarios and see how VA stacks up to some other mortgage programs.... 

 

 

 

Principal/Interest Payment

Monthly Mortgage Insurance

Total Monthly Payment ***

If Purchase: Down Payment Due at Closing

VA with 0% down

        $898

     $0

    $1198

      $0

Conventional with 3% down

        $871

   $185

    $1357

    $6000

Conventional with 5% down

        $853

   $93

    $1246

   $10,000

FHA with 3.5% down

        $881

   $201

    $1382

   $7000

USDA with 0% down

        $898

   $50

    $1248

      $0

For this general comparison, the same interest rate and term were used for each program and $200,000 was used as the sales price/value.  The table also was compiled assuming good credit.  In reality, for credit scores less than 740, Conventional interest rates and mortgage insurance premiums would start to increase, as Conventional pricing is greatly affected by exact credit score and Loan to Value.  This is not an offer to extend credit but is merely a general comparison chart with assumptions. 

*** For total monthly payment, which would include escrow, we assumed $250 per month for property taxes and $50 per month for homeowners insurance.  These figures, of course, will vary by property.   This is just to make an apples to apples comparison!

 

  

For more information about VA Mortgages in Pennsylvania, feel free to contact me.

 

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Keith Landis is a Licensed Mortgage Loan Officer covering all of Pennsylvania.  He can be reached directly at 412-567-6560 at klandis@keystonehomefinance.com 

NMLS # 137243

 

Keystone Home Finance LLC - NMLS# 834342

 

www.keystonehomefinance.com

 

Comment balloon 1 commentKeith Landis • July 08 2012 05:02AM

Comments

It's true that the FHA MI increases are a killer.  Every time I run a scenario for someone now, you hear the "ugh" when you get to the MI portion of the payment. 

This is only more evidence that if there is a good financing option available now, take it. 

Posted by Rob Spinosa, Vice President of Mortgage Lending, Marin County (Guaranteed Rate, Marin County, CA) over 6 years ago

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