Finding the best VA loans for bad credit in Aurora, IL can be a headache when you do not know where to begin. The loan program is the best one for veterans and service members in the market. Well, you have to jump over certain hoops to prove your eligibility too. Whatever you do, you need to remember that you must pass income and credit score requirements.
So, in this article, we mention the essential things you must remember before applying for the best VA loan that fits your needs.
Best Three Types of VA Loans in Aurora IL
As you have heard, there are different types of VA loan programs in Aurora, IL. Every type of mortgage comes with different benefits and guidelines. You can compare the loan benefits and features before making your decision. So, the first program that comes to our mind is the VA purchase loan. The program comes with standard guidelines and the Department of Veterans Affairs issues it. Borrowers can apply for zero down payment, so you need to look out for a lender who allows no down payment. This option also offers better terms that may differ from lender to lender.
The other option is not available for everyone but is exclusive to a certain group. VA Native American Direct Loan only works for native Americans who also served as veterans. Borrowers can refinance into NADL programs for lower rates.
On the other hand, VA renovation loans are suitable for renovation projects. The programs are not widely different from the traditional VA loans. You should look around for a mortgage lender that only offers this option.
Remember the VA Funding Fee Comes Along
Private mortgage insurance is not a factor when you are applying for a VA loan. On conventional loans, you have to pay for mortgage insurance when you do not make a down payment of 20% of the loan value. For VA loans, you need to pay a funding fee. VA funding fees range between 1.4% and 3.6% of the mortgage amount.
Ultimately, the VA funding fee is calculated depending on the borrower’s financial situation. In case you have a disability for serving in the military, you would not have to pay for funding fees. Meanwhile, you should get in touch with the Veterans Administration for more information.