A Brief Overview Of VA Construction Loan
A veteran home loan, shortly VA loan is a benefit given by the Department of Veteran Affairs, the government of USA to the qualified military veterans to invest in a home. While some veterans apply for VA loans to purchase a home, some others want to utilize it to build a new home from scratch as not everyone is willing to buy an already constructed house. Anyone investing in this program should analyze the guidelines and features very carefully before taking the plunge. Every state has different requirements when it comes to veteran loans and they can be confusing at times. Therefore, it is best to take the help of a trusted lending agency like us if you are looking for Texas VA construction loans to carry out the process in a hassle-free manner.
Zero down payment option
This is a military program that is much appreciated because of its zero immediate down payment option that brings great relief to the war veterans. The advantage of a VA loan is that repayments will not start until the construction is finished. Initially, the repayment could be delayed for one year, but the borrower must pay back the amount within the required time frame. However, if the home price is higher than the country limit, then some down payment will be required to cover the price.
Types of VA construction loans
VA construction loan helps a borrower to procure loans right from the mortgage phase until the completion of the construction. Two types of VA construction loans available, the first one requires an application for both the phases with two closing dates. These loans are tricky because of the feature of two closing dates though they were popular in the past decades.
A VA one-time close mortgage is an ideal type that has one application and one closing date and does not involve any ambiguities. The borrower can get away with the burden of qualifying the credit requirements twice. As a final loan approval step, the borrower will require getting builder permits and the remaining necessary paperwork to qualify for the construction phase.
Standards of lenders vary
One should be well informed in this phase because some lender does not approve this loan for modular homes, mobile homes, and multi-unit properties. Mostly it is approved towards a typical house built from the scratch.
Validation of the builder
According to rules, the construction work must be done by a builder who is registered with the system. It should possess proper documentation to carry out the process. A Texas VA mortgage lender will ask the builder to go through the approval process. Both the borrower and the builder will require submitting a well-formulated set of plans and specifications for the home to be constructed. The builder will mention the materials being used in the construction and the surrounding environment where the home is being built. The construction closing cost will be fixed by the builder at the time of the agreement. The whole process completes within 45 to 60 days.
Interest rates
There are not any specific regulations set by the government regarding the interest of the veteran loans. It will be decided based on the negotiation between the borrower and the lender. The rate also depends on a great degree on the borrower’s credit status. As a borrower, you must qualify credit requirements for all types of home loans, and this will enable you to grab the most competitive rate.
Final thought
As you have seen through the VA construction loan a veteran in the United States from the military background can build his dream home with fewer hurdles. Given the intricacy of the loan, guidance from a professional agency like us is necessary to make the process smoother and faster. Any individual applying for Texas VA construction loans can contact us for immediate help. We are a duly approved VA lender who assists you in your home building process in the best possible manner.
