According to Garrett Puckett, CEO of Security America Mortgage and 5th generation Texan, "Texas has many different types of loans, but the most important type is a VA home loan." Texas has one of the largest active duty service member populations with many military families and retired Veterans. Texas has a long history of service members and is a proud state with an amazing economy and kind people that always show Texas hospitality.
How Texas Veterans Can Save Big with VA Home Loans
Texas veterans can save big with VA home loans in several ways. Here are a few:
- No Down Payment
One of the most significant benefits of VA home loans is that eligible veterans can purchase a home without a down payment, saving them thousands of dollars upfront. - No Private Mortgage Insurance (PMI)
Since the government backs the Texas VA loan, they do not require private mortgage insurance (PMI), typically required on conventional loans with a down payment of less than 20%. These Texas veterans can save hundreds of monthly dollars on their mortgage payments. - Competitive Interest Rates
VA loans often have competitive interest rates compared to other loan types, which can save veterans money over the life of the va home loan. - Lower Closing Costs
Texas VA loans also have lower closing costs than other loan types, saving veterans thousands of dollars at closing. - Flexible Requirements
A VA home loan has flexible requirements, making it easier for Texas veterans to qualify for a va home loan. For example, veterans with lower credit scores or higher debt-to-income ratios may still be eligible for a Texas va loan.
Overall, Texas veterans can save significant money with a VA home loan, making achieving their dream of homeownership easier.
Do you pay private mortgage insurance on a VA loan?
No, borrowers who use a VA loan are not required to pay private mortgage insurance (PMI). Instead, VA loans require a one-time funding fee that can be rolled into the loan amount. The funding fee amount varies based on factors such as the borrower's military service status, down payment amount, and whether the borrower has used a VA loan in the past.
The absence of PMI is a significant advantage of VA loans, as it can save borrowers thousands of dollars over the life of the loan especially if you're a disabled Veteran exempt from the va funding fee.
What is the difference between mortgage insurance and private mortgage insurance?
Mortgage insurance is a type of insurance that protects the lender if the borrower defaults on the loan. Mortgage insurance can come in different forms, and one common type of mortgage insurance is private mortgage insurance (PMI).
PMI is a type of mortgage insurance that is typically required for borrowers who make a down payment of less than 20% of the home's purchase price when obtaining a conventional loan. PMI is usually paid as a monthly premium, and the cost of PMI can vary based on factors such as the borrower's credit score, loan amount, and down payment amount.
The Federal Housing Administration (FHA) requires borrowers to pay a mortgage insurance premium (MIP) to protect the lender in case of default. On the other hand, Texas VA home loans do not require PMI or MIP, but they do require a one-time funding fee that can be rolled into the loan amount.
Who are eligible borrowers under the Texas Veterans Land Board?
The Texas Veterans Land Board (VLB) provides various Texas va loan programs to eligible Texas veterans, military and active service members, and their families. To qualify for VLB programs, a borrower must meet specific criteria, including:
Military Service
To be eligible for a VA loan in Texas, the borrower must have served at least 90 days as an active duty service member or Texas National Guard or Reserve member, with an honorable discharge.
Texas Residency
The borrower must be a Texas resident at the time of application and throughout the loan.
Home Purchase
VLB loans are available to purchase existing homes, new construction, and foreclosure properties.
Land Purchase
VLB loans, including rural properties and recreational land, are also available for land purchase.
Credit and Income
Borrowers must meet certain credit and income requirements to qualify for VLB loans.
Disability
Borrowers with a service-connected disability may be eligible for additional benefits under the VLB program.
In addition to meeting the eligibility requirements, borrowers must meet specific credit and income criteria to qualify for VLB loans. It's important to note that each VLB loan program has specific eligibility requirements and loan terms. So, it's best to consult with the VLB or a qualified lender for more information on available programs and their eligibility criteria.
Do private lenders in Texas fund VA loans?
Yes, private Texas va lenders can fund Texas VA loans. While the U.S. Department of Veterans Affairs (VA) guarantees certain VA buyers' loans, they do not lend the money themselves. Instead, Texas va private lenders, such as banks and mortgage companies, provide the funds for VA loans, and the VA guarantees a portion of the loan amount, which helps to reduce the risk for lenders and make the loans more affordable for borrowers.
To obtain a Texas VA loan, borrowers must work with a private lender that the VA approves to participate in the VA Home Loan program. These lenders must meet specific standards and guidelines set forth by the VA and have a VA-assigned appraiser evaluate the property to ensure it meets the VA mortgage amount requirements.
Borrowers must shop around and compare rates and terms from multiple lenders when considering a VA loan. While the VA sets specific guidelines and requirements for Texas VA loans, private lenders may offer different rates, fees, and services, so finding a lender that meets your needs and offers competitive terms is essential.
Will Texas VA loan limits increase in 2023?
In 2022 the VA announced there will no longer be va loan limits for borrowers with full entitlement. This doesn't mean that your lender won't have a limit and of course your debt to income ratio, credit, assets and compensating factors affect how much you can borrow. So, in summary there aren't any VA loan limits in Texas or other states for 2023 according to the Veterans Affair
Can you get a VA cash-out loan in Texas?
The VA doesn't restrict Texas Veterans from a VA cash-out loan in Texas. A VA cash-out refinance loan allows eligible borrowers to tap into the equity they have built up in their home and receive cash back for any purpose, such as paying off high-interest debt, making home improvements, or covering other expenses.
Texas restricts Veterans from taking equity out of their home with a cash out refinance but it is possible for Veterans to do a Conventional loan cashout refinance. Additionally, in all states the VA has specific rules and guidelines for VA cash-out refinance loans, including limits on the amount of cash that can be received and restrictions on how much money can be used.
Borrowers need to understand the costs and risks associated with a VA loan and the potential benefits. While a cash-out refinance can provide access to needed funds, it also increases the debt owed on the home and may result in a higher monthly mortgage payment.
Borrowers considering a VA cash-out loan in Texas should consider alternative products such as a va renovation loan, home equity loan and conventional refinance cash out.. It's also a good idea to compare rates and terms from multiple lenders to find the most affordable and suitable loan for their specific needs and financial situation.
Do veterans get property tax exemptions in Texas?
Veterans united home loans may be eligible for certain property tax exemptions. Texas offers some property tax exemptions and benefits for veterans, including:
- Disabled Veterans Exemption: This exemption is available to veterans with a service-connected disability rating of 10% or higher. It provides a property tax exemption of up to $12,000 of the assessed value of the veteran's residence homestead.
- Disabled Veterans Additional Exemption: This exemption is available to veterans with a service-connected disability rating of 100%. It provides an additional property tax exemption of the total appraised value of the veteran's residence homestead.
- Homestead Exemption: This exemption is available to all homeowners, including veterans, who use their property as their primary residence. It provides a property tax exemption of up to 20% of the property's assessed value.
- Over-65 Exemption: This exemption is available to homeowners who are over the age of 65, including veterans. It provides a property tax exemption of up to $10,000 of the property's assessed value.
- Surviving Spouse of Disabled Veteran Exemption: This exemption is available to the surviving spouse of a disabled veteran who has not remarried. It provides a property tax exemption of up to $12,000 of the assessed value of the homestead.
To be eligible for these property tax exemptions, veterans must meet specific eligibility requirements, such as having a service-connected disability rating, owning and occupying the property as their primary residence, and meeting certain income and asset limitations. Veterans should contact their local tax assessor-collector's office or county veterans loan officer for more information on how to apply for these exemptions.
Can I use a Texas Vet or VA Loan to build a home?
Yes, Texas Vet and VA loans can be used to purchase land and build a home in Texas. However, the process for using these loans to build a home may be slightly different than using them to purchase an existing home.
The Texas Veterans Land Board (TVLB) loan is a program designed to provide financing assistance to eligible Texas veterans and their families to purchase land, homes, and home improvement projects. Here are some key points about how the program works:
- Eligibility: To be eligible for a TVLB loan, you must be a Texas resident, a veteran or an active-duty military member, and meet certain service requirements. You must also have a good credit score and a stable income to qualify.
- Loan Types: The TVLB offers several loan types, including land loans, home loans, and home improvement loans. The land loans are for buying or improving rural land, while the home loans can be used to purchase an existing home or build a new one. The home improvement loans are for making repairs or improvements to a home that is already owned.
- Interest Rates: The interest rates on TVLB loans are typically lower than market rates, making them an attractive option for veterans and their families. The interest rates vary depending on the type of loan and the length of the loan term.
- Loan Limits: The loan limits for TVLB loans vary depending on the type of loan. For land loans, the maximum loan amount is $125,000. For home loans, the maximum loan amount is $424,100, and for home improvement loans, the maximum loan amount is $25,000.
- Repayment: TVLB loans are typically repaid over a period of up to 30 years. The loan repayment terms vary depending on the type of loan and the amount borrowed.
Overall, the Texas Veterans Land Board loan program is a great option for eligible veterans and their families looking to purchase land, a home, or make home improvements. The program provides affordable financing with favorable terms and interest rates to help make homeownership more accessible.
For VA loans, the VA also offers a construction loan option known as a VA construction-to-permanent loan, which allows eligible borrowers to finance the construction of a new home with a single loan that converts into a permanent mortgage once the building is complete. However, it's important to note that VA construction loans are not offered directly by the VA but are available through private lenders participating in the VA's loan program.
Is there a prepayment penalty with a VA loan?
No, there is no prepayment penalty associated with VA loans. This means borrowers are free to pay off their VA loans early without incurring additional fees or charges.
This policy encourages homeownership and gives borrowers more flexibility and control over their finances. It also means that borrowers can save money on interest charges over the life of the loan by making additional payments or paying off the loan early.
However, it's important to note that some lenders may impose their prepayment penalties or fees. Borrowers should carefully review their loan agreement and any other documentation provided by their lender to understand the terms and conditions of their loan, including any potential fees or charges for early repayment.
Overall, VA loans are designed to provide affordable and flexible financing options for veterans and active-duty service members, and the absence of a prepayment penalty is one of the many benefits of these loans.
