Michael Holigan: Did you know there are some Americans that can buy a new home with no money down with competitive interest rates? Sound like a great deal? It is. There's just one catch. Ed and Mariam Rose are among thousands of home buyers each year taking advantage of loans from the Department of Veteran Affairs. The catch with VA loans is, like Ed Rose, you must be a military veteran to qualify. Ed served four years of active Air Force duty.
Ed Rose: Well, the VA loan was more advantageous for us because we didn't have to come up with a down payment. We could spend more money on our upgrades and not tie up a lot of cash at the front end.
MH: Another advantage, you can qualify for more home with a VA loan than most other loans. With a conventional loan your monthly payment typically cannot exceed 33% of your monthly income. With a VA loan your payment can be as high as 41% of your total monthly income. VA loans do require a funding fee for the program. The Roses opted to make that part of their payments.
ER: It's actually rolled into the financing. You can choose to pay that up front or have that rolled over.
MH: And buyers with VA loans are avoiding another big fee called mortgage insurance or PMI. It's charged on most other loans where the buyers put down less than 20%. The VA loan is a great deal for people who answered the call to serve their country.
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Episode 50 1997 - 98 Season
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