By Josephine Q. Michael
The millions of military veterans and qualifying personnel that are receiving home financing through the VA programs are likely to have a few questions about the adjustable VA loan rates. ?Adjustable? has never been a term that potential homebuyers like to hear when talking about their financing rate for their mortgage. However, the home loans that are provided under the VA program?s special terms include a different ?adjustable? rate than what those homeowners are familiar with, one that veterans should actually be pretty excited about.
The big concern for a normal adjustable rate has always been the fact that they can adjust by an undetermined amount an undetermined number of times, making it impossible for the homeowner to know what their rate will be throughout the life of their mortgage. VA loan rates don?t function the same way that those others do, because there are rules implemented to ensure that the rate only changes a little at a time and that it is never allowed to increase beyond a certain amount.
The first of these regulations is the fact that the rate is not allowed to be altered by more than one percent in either direction, whether it is being raised or it is being lowered. To make things even better, the rate can only be adjusted one time per year, so the most you would ever see is an annual increase of one percent.
To many skeptics, that still leaves the fear that the rate could climb fifteen percent after fifteen years, but there is yet another rule in place to ensure that you won?t have to worry about that either. The VA program places a cap on how much a rate can be adjusted for the duration of the mortgage. With adjustments being capped at five percent, if your rate increased by one percent for five years, you would be left with a rate that cannot be altered any further and practically becomes a fixed rate.
Thanks to these special regulations enforced by the Department of Veteran Affairs, military veterans and other military personnel can buy their homes with full knowledge of what to expect from the loans. You can be sure that this kind of loan is a rare gem in today?s housing market, so any veteran looking to purchase a home should definitely consider getting their mortgage through a participating VA lender.
Utilizing your home loan benefits with the VA will provide you with unbelievable savings and opportunity through va loan rates and va hybrid loan.
Source: http://loanx.us/the-pleasant-facts-of-adjustable-va-loan-rates/
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