Complete List of VA Loan Benefits for Kentucky Veterans
• Eligible homebuyers are not required to have a down payment in most cases – typically cited as the greatest VA loan benefit. Conventional loans generally require a 5 percent down payment, and FHA loans require 3.5 percent.
• No monthly mortgage insurance premiums or PMI to pay. FHA loans come with both an upfront and an annual mortgage insurance charge. Conventional buyers typically need to pay for private mortgage insurance unless they’re making a down payment of 20 percent or more.
• Limitation on buyer’s closing costs. Sellers can pay all of a buyer’s loan-related closing costs and up to 4 percent in concessions.
• Lower average interest rates than other loan types. VA loans continue to have the lowest average interest rates of all loan types.
• No prepayment penalties. VA buyers can pay off a loan early without any financial penalties.
• Two refinance options. The VA loan program allows homeowners with existing VA loans the option to lower their monthly payment with a new interest rate. Eligible homeowners who financed their property with a loan other than a VA loan can refinance into the VA loan program.
• Second tier entitlement. Even though many veterans have already used their loan benefits, it may be possible for them to buy homes again with VA financing using remaining or restored loan entitlement.
• An assumable mortgage, typically subject to VA and/or lender approval. You may be able to have someone take over your mortgage payment, which can be a big benefit in an environment of rising interest rates.
• Foreclosure avoidance advocacy from the VA loan program. The VA has staff members who advocate on behalf of homeowners to find alternatives to foreclosure.
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New Kentucky VA Mortgage Loan Limits for 2020 for Kentucky Veterans
VA loans no longer have a maximum loan amount.
- Veterans, active-duty service members, National Guard members, and surviving spouses (those who qualify) will be able to get a VA home loan for any amount, with no required down payment.
- Income guidelines are still in place.
- With loan limits now gone you can borrow 100% of what you financially qualify for.
- Loan limits will still be applied if you have one or more active VA loans or if you’ve defaulted on a previous VA loan.
- Mortgage insurance is not needed..
Funding Fees for VA Loans Are Not Going Away
Even with the loan limits going away, there is still an upfront funding fee for all VA loans (unless you are getting a VA home loan as an active-duty service member who’s received a Purple Heart). 2020 brought changes to these funding fees.
Here’s the updated funding fee percentages for VA loans:
To explain further, the fee for first-time use went up from 2.15% in 2019 to 2.30% in 2020. The fee for subsequent use went up from 3.3% in 2019 to 3.6% of the loan in 2020. These fees will stay in place until 2022, and you can choose to pay the funding fee up front or just roll it into the total cost of the home loan.
Additional VA Loan Benefits:
- You can reuse your VA mortgage benefits over and over
- You don’t have to be a first-time home buyer
- No pre-payment penalty so you’re free to consider future home purchases and refinancing options
- Can be used to buy a house, condo, newly-built home, and other types of properties
- Your eligibility never expires
How Do You Know If You’re Eligible for a VA Loan?
Eligibility is based on specific guidelines established through the U.S. Department of Federal Affairs. These guidelines are typically based on service and discharge requirements.
- You must have a valid Certificate of Eligibility (COE) to apply for a VA loan