Lower Mortgage Rates With the Maine VA Mortgage Home Loan Plan

Lower Mortgage Rates With the Maine VA Mortgage Home Loan Plan

Did you know that the United States Department of Veteran Affairs offers a home loan plan specifically catered to veterans and active military?  If you’re like many other military service members, you may not have known about this home loan plan. However, that doesn’t mean it’s not available to you. Read on to learn more about the plan how you can apply for it, and its pros and cons.

You Get A Fixed Rate

A fixed rate means no adjustments to your monthly payment. You don’t have to worry about the amount you need to borrow changing and affecting the interest you pay. Most conventional mortgages have an adjustable rate, which means the interest rate could change by a few percent each year. With a VA mortgage, your rate is locked in. 

While a fixed rate comes with a lower rate, it also has less risk. You’re not at risk of going from a low rate to a higher rate in a year or two. You can count on getting a fixed rate.  With an adjustable rate mortgage, you could find yourself paying more at the end of the loan if the interest rate rises. With a fixed rate, you’re protected if the interest rate drops. This can protect your monthly payment in a low rate environment. Your monthly payment stays the same no matter what the market does.

You Can Qualify For A VA Loan Without Being A Veteran

The minimum age to get a VA loan is 62. You must have served at least 90 days in a war zone, or have served at least 90 consecutive days in the military, to qualify. You can get a VA loan without having served, but your loan will have a much higher interest rate. The VA loan interest rate is usually in the 5.5 to 6.5 percent range. Approval for the loan depends on your credit score as well as your assets and liabilities. 

But, if you have assets that offset your liabilities, you may qualify for a lower interest rate.  To qualify, your credit score must be at least 620. You must have at least 10 percent equity in your home. You must have good credit, but your assets and liabilities don’t have to be in perfect order. VA loans may not be your only financing option. If your credit score isn’t high enough, you can still get a conventional loan. But, having a VA loan option gives you access to a low interest rate and stability in your home.

You may want to shop around for a Maine VA Mortgage broker. Even though the VA has a fixed interest rate, it doesn’t have a large selection of lenders. The VA only has one loan provider. So, if you want to explore the market and find a lender better able to meet your needs, a broker can help. 

Stability In Your Home

While a VA loan is guaranteed by the government, it’s still a mortgage. You’re still obligated to make your mortgage payment. You don’t want to make a payment that puts your home at risk. Mortgage lenders must follow certain rules when processing a mortgage. Lenders must maintain your home’s value and keep a certain equity in your home. As long as you make your payments on time, the lender stays in your home. That’s an important safety net.  A loan that comes from the government is a government-guaranteed loan. You may have to pay higher interest rates on the loan, but you won’t have to worry about defaulting on the loan. You can keep your home and maintain stability in your life. Click here to find out more.

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Skye Marshall

Ivy Skye Marshall: Ivy, a social justice reporter, covers human rights issues, social movements, and stories of community resilience.