Looking for Loans

More than 18 million members of our country’s proud military have become home owners with the help of home loans from the Department of Veterans Affairs. Congress passed the VA loan guarantee program in 1944 to help returning GIs achieve their American dream. Many Summit NJ listings are purchased with it.

What it is?

A VA loan is a powerful and flexible tool in the world of lending. The VA doesn’t actually issue a loan. Instead it guarantees the loan made to a member of the military. It will repay up to about a quarter of the value of the loan in the event that the buyer defaults. This gives a VA-approved lender protection and makes the borrower a safer bet. A lender with a guarantee may be able to garner better terms and more competitive rates which can make owning Summit NJ real estate a more attainable goal.

What are the benefits?

VA loans carry some serious benefits. Borrowers can secure a loan with no money down and no private mortgage insurance. This fact alone brings many military families to their Summit NJ real estate agent.

Less stringent underwriting standards like higher allowable debt to income ratios also make buying property more affordable. Competitive rates and no prepayment penalties can help a buyer pay off their home sooner.

Who qualifies?

Many veterans and active duty personnel qualify for VA loans. An active duty service period of 181 days or 3 months during war time will qualify a service person for a VA loan. National Guard members and reservists with 6 or more years also qualify. Spouses of those who have paid the ultimate price for our freedom qualify for VA loans. Those who qualify should request a Certificate of Eligibility online. A VA-approved lender can help the borrower obtain the proper forms and certificates.

Buying life insurance is practical, since it provides your beneficiaries with financial stability in case you die. It provides for your family to live a lifestyle that they need. It can send your children to school, even if you are not there with them. They can eat and have some food on the table, even though you long gone.

Life insurance provides an income tax free death benefit and no tax on the increase in the cash value as it grows over time. People buy insurance for many different reasons such as to cover funeral costs, replace lost income, provide liquidity to pay expected estate taxes, etc. Actually not only the beneficiaries can obtain a lower tax burden but as well as the policy holder wherein he can be able to cash on some tax free benefits during his lifetime.

Beneficiaries are not required to pay income tax on life coverage benefits especially both in term and whole life coverage. One thing more, there is no tax also on borrowing money against the cash value of your insurance policy but if ever you do not pay the policy back, then you will lose the commensurate amount of tax free death benefit. So always be sure to pay it back on time.

Take note that if you own an insurance policy on yourself in your own name, then the death benefit becomes part of your estate and considered taxable under the estate tax laws. That is why to avoid this thing to happen, place the policy in an irrevocable insurance trust. However, that means you give up direct control of the policies and even lose access to any cash value that may accumulate. So good planning and thinking twice is needed before doing it.

VA loans, specifically developed for active military and veterans, offer a great home-buying opportunity. Featuring relaxed requirements, fast approvals, and multiple benefits they are a great financing tool for qualified individuals. Should you be an active military or a retired veteran looking to buy a home, a VA loan is the first thing you should look into.

Saving Money Is No. 1 Benefit of Military Loans

VA loans can save you money in many ways. Unlike other home loans, VA loans do not require any down payment. It is a great opportunity to become a homeowner without waiting for years to save up money to put down on a new home. The money saved may be used for anything a borrower may desire.

Mortgages greater than 80% of home equity require mortgage insurance, commonly known as PMI. Military loans have this requirement waived, saving a borrower another good chunk of money. The VA issues loan repayment guarantees to lenders, ensuring repayment in case of defaults. That alone eliminates the need for private mortgage insurance.

Another great benefit of military loans is lower interest rate. Lower rates always result in lower monthly payments, freeing up the funds for other uses and decreasing overall borrowing costs.

Easy Qualification Criteria Are an Unparalleled Advantage of Military Loans

Income requirements are way less restrictive than with traditional home loans. In fact, the VA does not require borrowers to have a large household income in order to qualify – a minimum residual income requirement is very low and easily achievable by most, if not all, borrowers. The VA also does not enforce minimum credit score requirements, like most lenders do. The only qualification to meet is maintaining delinquent-free credit history for at least one year before making a loan application. Similarly to other loans, a maximum debt-to-income requirement is enforced by the VA in order to ensure the ability of the borrower to handle debt service.