Homeowners FAQ

media-file-homeowners-FAQ

Intend to purchase a new home? Check out our FAQ section to clarify certain doubts that you may have with regard to the buying process.

What is a USDA Loan?

The Rural Development mortgage plan was introduced by the United States Department of Agriculture. It aims to provide an avenue for low to moderate-income earners to be able to own a home in various rural and suburban areas.

Am I Eligible for a USDA Loan?

To check for eligibility, visit www.usda.gov for income requirements and approved locations.

Can I Finance Through USDA Again If I am A Current Borrower?

Yes, it can be used to finance your next home but not for a second home, investment property, or vacation home.

What is a VA Loan?

This loan is guaranteed by the U.S. Department of Veterans Affair. Its purpose is to aid active military members, veterans, and surviving spouses to own a home. VA loans are provided by financial institutions that are VA-approved and backed by the government.

Do I Need a Down Payment for a VA Loan?

A typical VA loan does not require you to make any down payment.

What is an FHA Loan?

This loan is insured by the Federal Housing Administration. Its goal is to help more people own a home. It requires a down payment, but its amount is relatively much lower than other conventional loans. An FHA loan is recommended for first-time buyers.

What Does it Mean to Refinance?

A refinance means taking out a new loan to replace the old loan at a new term and interest rates.

Why Some Borrowers Refinance?

Several reasons for refinancing are as follows:

  • Lower monthly payment by refinancing at lower interests
  • Changing loan terms
  • Converting to a fixed rate loan from an adjustable-rate mortgage

What are the Benefits of Refinancing?

Refinancing a VA or FHA loan requires little documentation as compared to conventional loans. There is also no requirement of an appraisal for qualifying borrowers. 

How Does a Cash Out Refinance Work?

A cash out refinance lets homeowners use their home equity to obtain cash. This cash can be used to consolidate debts, make home improvements, and more. The borrower gets a higher loan and the difference in amount is received at closing. The refinanced loan may have a higher interest rate because the loan amount may be a higher percentage of the property’s value.

What Does the Term COE Refer to?

The term refers to a Certificate of Eligibility which is presented to those who are eligible for a VA loan.

How to Obtain a COE?

During the application of a VA loan, the financial institution will work with borrowers to obtain the COE before the loan process can commence.

I am not a Veteran, but my Relative is. Am I Eligible for a VA Loan?

No, only veterans or surviving spouses can apply for a VA loan.

Can I Still Apply for a VA Loan without a Good Credit Score?

There is no minimum credit score required to apply for a VA loan. However, each lender has different guidelines that applicants must meet.

I have used a VA loan before, can I re-apply for it again for my next home?

Yes, you can use it for your primary residence as many times as you need as long as it is just a single VA loan at any one time.