Knowing Your VA Loan Options

If you aren’t familiar with the many types of home loans available to qualified borrowers under the VA loan program, you might be surprised to learn about your options, which can include fixed rate, adjustable rate, or even a graduated payment VA loans.

One thing to keep in mind about the variety of VA loan possibilities under the program is that any participating VA lender may offer some of these types of VA loans but not necessarily all of them--the key is to understand the nature of the VA loan program and how participating lenders work with the Department of Veterans Affairs.

In addition to the type of loan (fixed, adjustable rate, etc) there are also some options to consider that have more to do with add-ons to the loan and how many people are obligated on it. The VA official site (www.va.gov) lists a variety of different VA loan options including Joint Loans between one or more veterans or one veteran and one or more non-veterans. Also available--the VA Energy Efficient Mortgage which permits borrowers to add substantial amounts of money (up to six thousand dollars in some cases) in order to add energy efficient improvements to the house.

There are also loans which feature temporary interest rate buydowns, and even Growing Equity Mortgage options under the VA home loan program. It’s important to keep in mind when considering these options that your participating VA lender is not required to offer ALL of these loans and options. If you are shopping around for a VA mortgage and need a Growing Equity Mortgage loan, you may have to try one or more lenders before you find one willing to offer this type of home loan.

VA cannot force a lender to offer one type of loan or one type of loan over another. The voluntary nature of the VA loan program means a lender can feel free to offer some types of loans but not others, offer some types of refinancing loans but not others, or require more stringent credit score requirements than other banks or financial institutions.

Your VA lender must offer the loans it does have in its list of options fairly and according to federal Fair Housing Act laws. A lender can’t selectively require a better FICO score for some borrowers than others, and a lender can’t offer a loan with one set of standards to one borrower, but change the standards for a different borrower for the same type of loan, circumstances, etc.  The lender must comply with Fair Housing Act regulations in all types of home loan situations.

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