How does a va home loan work
Best Answer: VA Loan Information: Visit the home page of the VA. http://www.va.gov/
The VA has increased their loan limits! The maximum loan amount in most cases is $417,000. The VA also offers some advantages over conventional loans:
What's been posted at the official government Veterans Affairs link here provides you with the answers to most of your questions, BUT there are some extra things you ought to know.
Be advised, however, that in spite of the various advantages like no down payment required and no PMI, a VA loan may not be the best one for your circumstances. Some examples:
(1) It may not be the lowest interest rate. If you have a good score or are eligible for other special programs (many states have first
time homebuyer programs with excellent rates) the VA loan might not be the lowest rate.
(2) VA loans can't be used for buying investment property.
(3) The "no down payment" required isn't exactly true -- the lower your down payment, the more likely a vet will have to pay a funding fee, often up to 2% of the loan amount. This could be as much as 8000 on the current maximum loan amount, on top of other closing costs (see the VA web site for examples).
Bottom line -- the VA loan is a nice benefit that in many cases provides a veteran with a better way to finance a home purchase. But the prudent shopper will look at all the choices and decide based on their own personal situation.Source: answers.yahoo.com