VA Loans in Rancho Palos Verdes
For many, it would be a dream come true to live in Rancho Palos Verdes, CA. Its lush hills and beautiful view of the ocean are breathtaking. And for that reason, homes there are not cheap, the median price being around $900,000.
With the recent growing popularity of government-backed mortgage programs, though, more families are able to accomplish their dreams of homeownership and do it where they want. U.S. Veterans and active duty service members are one group of people who can use government benefits to their advantage.
Uncle Sam’s Benefits for Military Members
$8,000 tax credit
The tax credit helped many first time homebuyers of the year 2010 put a down payment on a new home. But with active duty service members’ hectic and unique schedules, it would have been hard to go through the process of buying a home without better notice. So, the government recently extended the deadline for the $8,000 tax credit to April 30, 2011.
BAH and OHA
Although the Basic Allowance for Housing and Overseas Housing Allowance might not apply to all military members, it’s good for service members to know that stipends received from these programs can be put towards mortgage.
BAH is for service members who cannot obtain government quarters within the U.S. The Department of Defense then compensates the military member, giving him or her a monthly allowance based on the local housing costs in which he or she resides. The amount received is determined based on current rates of the program, plus the pay grade and dependency status of the military member.
The biggest home buying benefit Uncle Sam provides for veterans is the VA mortgage program. Obviously, a veteran should be able to easily own a home in the land they sacrifice so much to protect. Obtaining a loan is usually quite difficult and stressful. However, the VA loan program was made to take the stress out of the process, and help veterans find their dream home for their families.
VA Mortgage Benefits
Because the Department of Veteran Affairs insures the loan, lenders and homebuyers consider it to be a great option for homebuyers. In one year alone, the VA office has already backed 450,000 loans, totaling more than $40 billion. VA mortgages as much as $1 million were backed in higher cost areas like Palos Verdes, although, the general limit of VA loan is between $207,000 and $417,000.
In addition to its being readily approved, the loans require no down payment.
Closings costs, appraisal and origination fees are low. Not only does the VA not require monthly private mortgage insurance, but it also forbids lenders from charging it. PMI could potentially costs around $100 to $250 per month on the first three to five years of the loan. A veteran can save so much!
There will be a VA funding fee, which is usually around two percent of the loan. The fee can be lowered in cost if the Veteran decides to make a down payment of at least five percent.
A veteran’s credit scores also do not need to be as high as is required for a conventional loan. Even people with great scores can be denied for conventional mortgages. However, to get those jumbo VA loans, a veteran should work to raise his or her score as high as possible. A higher credit score and reasonable debt to income ratio could help one to get a loan amount up to $729,000 for sure if not a little bit more.