Are VA Loans Insured?
When you take out a home loan, the borrowing process seems simple on the surface. You borrow money and make payments every month until the loan is paid off in full. This is true in most cases, but what happens if you can’t afford to continue making payments? The lender is at-risk for losing out on the money you owe them. That’s why lenders always prefer mortgages that are insured. So, are Dallas VA loans insured?
VA Loans Are Backed By the VA
For qualified military members, VA loans are the easiest way to get the money you need to buy a house. They’re backed (insured) by the Department of Veterans Affairs. If something happens and you default on the loan, the VA helps guarantee that the lender gets at least a portion of the money you owe them. Keep in mind that you may also end up forfeiting your home should you stop making monthly payments on your mortgage.
The Guarantee Is Automatic
Traditional mortgage lenders often require home buyers to take out private mortgage insurance to guarantee the loan if the down payment they put down is below 20 percent of the home’s sale price. For Dallas VA loans, that guarantee is automatic. It’s just one of the benefits to using a VA loan and can save you money when you’re trying to get into your dream house.
The Amount of the Guarantee Isn’t Set
Every guarantee is different and is based on the value of the house you’re buying with a VA loan. Typically, the VA guarantees a maximum loan amount of $484,350, but that number can change by the year, so always check with your VA loan expert before you start looking for homes. The last thing you want to do is fall in love with a property you can’t afford.
If You Qualify, Use a VA Loan
Just because you’re a qualified borrower doesn’t mean you have to buy your house with a VA loan, but using traditional mortgages isn’t in your best interest. Dallas VA loans will save you money and make it easier to get into your dream home. Apply today.
