This script explains the VA Funding Fee, and how it compares to other loan programs.

If you are a veteran, buying a home using your VA Home Loan Benefit may get you into the house of your dreams!  In fact, many VA borrowers say that buying a home with no money down is the VA program’s biggest advantage.  But did you know that there are many other advantages of a VA mortgage that provide huge benefits, especially compared to other available financing options.

This is (Name) with (Company) and I’m here today to talk the benefits of 100 percent financing and no mortgage insurance with a VA home loan.

VA loans usually have less stringent underwriting guidelines and closing costs may be lower.  Another big advantage of VA loans that is often overlooked is the absence of monthly mortgage insurance payments.

What is Mortgage Insurance?

Mortgage insurance is often used when borrowers have a loan-to-value that is 80 percent or higher.  Mortgage insurance or MI gives lenders the confidence to lend to buyers who are putting less than 20 percent down.  Borrowers pay for the mortgage insurance premium.  The premium may be in a one-time charge, monthly charge or both in the case of FHA and USDA loans.

Conventional Mortgage Insurance

Conventional loans require a minimum of 3 percent down payment.  Borrowers who are not able to put at least 20% down will be required to have Private Mortgage Insurance, or PMI.  PMI rates on conventional home loans vary depending on factors like your credit score, down payment, loan amount, etc.

FHA Mortgage Insurance

FHA loans require a minimum down payment of 3.5 percent.  FHA collects both an upfront mortgage insurance premium as well as an annual premium.  The upfront portion is added to your loan balance and the annual fee is typically spread across the life of the loan and added to your monthly payment.

USDA Mortgage Insurance

The USDA Rural Development program is another government backed home loan option that offers 100 percent financing.  Like FHA home loans, USDA loans have both an upfront and an annual mortgage insurance charge.

VA Mortgage Insurance

Qualified VA borrowers can purchase homes up to the conforming loan limits in their areas without having to factor in a down payment. There is no mortgage insurance on VA home loans.  This means that there is no private mortgage insurance or upfront or annual mortgage insurance on a VA Home Loan.

VA loans do come with a one-time funding fee which most VA borrowers choose to add to their loan amount and borrowers with a service-connected disability may be exempt from paying the funding fee.

Using your VA Home Loan Benefit could mean getting into the home of your dreams without having a down payment and without having the added expense of mortgage insurance.  Whatever your home ownership goals are, now may be the perfect time to use your VA Home Loan Benefit!

Thanks for watching.

 

Michael Anthony O’ Connor
President
Certified Veterans Lending Specialist
NMLS# 254139
CA DRE: 01149902
(833) 444- 3464
www.michaelanthonyoconnor.com
Mike@Got-Funding.com