There are multiple benefits available for veterans securing a VA loan and recent updates make VA mortgage loans an even better choice for some. To better prepare veteran borrowers for their next big purchase, let’s take a look at what the 2020 VA loan limit changes mean for upcoming applicants.
The 2020 VA Bill
Earlier this year, the Senate and the President approved the Blue Water Navy Vietnam Veterans Act to award veterans with higher benefits in healthcare and homeownership for 2020. The bill removed the previous loan limit of $484,350, allowing the Department of Veteran Affairs (VA) to support veteran borrowers seeking larger home loans.
VA loan limits represent the maximum zero-down amount that the VA can guarantee regarding good credit risk, but this does not represent the amount that a lender is guaranteed to approve. The final approval decision is still in the hands of mortgage lenders.
VA Loan Fees
As of January 1, 2020, veterans in nearly every county in the United States will be able to borrow at higher amounts—without making a down payment. However, removal of the loan limit comes at a small price to borrowers in the form of additional loan fees. Per the 2020 changes, the funding fee without a down payment is set at 2.30% for first-time users and 3.60% for subsequent users.
Spouses of veterans who died in active duty or suffered fatal disabilities from their service may be eligible to have these fees waived. Similarly, active-duty Purple Heart recipients will also be exempt from these fees, but there are other loan requirements that all veteran applicants must keep in mind. Regardless of the loan limits or applicable funding fees, borrowers must meet standard lender requirements regarding credit and income to qualify for VA mortgage loans.
VA Loans in Central Florida
Finding the right mortgage product to purchase or refinance a home can be difficult when the options and limitations are constantly changing. Fortunately, the loan experts at Butler Mortgage are here to help Central Florida citizens make the best borrowing decisions. Whether you’re looking for a VA loan or any other mortgage solution, our team of loan professionals will guide you through the optimal mortgage options for your finances. Call us today for a free consultation at 407-931-3800.