When making a major financial decision such as mortgaging a home, it is important to take advantage of all of the applicable assistance programs available. For our country’s veterans, there exist several benefits that can be applied to a mortgage that will make buying a home much more affordable and easier to secure. Today, we will be going over who is eligible for a Maryland VA loan, the advantages that come with it, and finally, other loan programs available for veterans in Maryland.
What is a VA Loan?
A VA loan is a loan program where the loan is offered by a private lender, such as a bank or mortgage company, and is guaranteed by the Department of Veterans Affairs. VA loans were created with the purpose of offering affordable home buying options for veterans to mortgage a home after a specific term of service. The VA guarantees a portion of the loan which will allow the lender to offer more favorable mortgage terms. Before getting into the many advantages of a VA loan, one must determine if they fit the criteria for eligibility.
Who is Eligible for a VA Loan?
Eligibility for a VA loan is not simply attained just from being an active service member as certain credentials have to be met. It can depend on how long you served and when, for example, if service members served for 90 consecutive days during or were active during wartime, served for 181 consecutive days during peacetime, or served for six years in the National Guard or Reserves, then you are eligible. For veterans, minimum service requirements depend on when you served. Refer to the Veterans Affairs website for a detailed list of previous conflicts that the United States was involved in. You can also find the application for a Certificate of Eligibility or a COE on the VA website. Finally, if you are the spouse of a service member who passed away while in the line of duty or due to service-related issues, you also qualify for VA loan eligibility.
Advantages of a VA Loan
There is a long list of benefits and advantages that come with a Maryland VA loan that makes mortgaging a home much more affordable and streamlined. One of the most attractive benefits of a VA loan is that there is no down payment required. Being one of the most difficult initial steps in a mortgage, not having to pay a down payment opens up the possibility of taking on a mortgage for many veterans. Another advantage, and cost reducer, is the ability to defer having to pay mortgage insurance premiums or PMI. When taking out a Maryland VA loan, average interest rates are significantly lower than normal mortgage loans. Having lower interest rates means that the cost of the loan will be much less over the duration of the loan term. Veterans will also enjoy lower closing costs as well as no prepayment penalty. Combine all of these advantages and it is easy to see how a VA loan can easily be an affordable and beneficial financial expenditure.
Other Maryland VA Loan Programs
While the VA loan program offers a multitude of advantageous mortgage benefits, there are other programs in place for veterans that can be utilized to get the most out of your mortgage. While these programs aren’t specifically reserved for veterans, they may still qualify for these programs.
The Maryland Mortgage Program
The Maryland Mortgage Program or MMP, is a 30-year fixed rate home loan for first-time home buyers who are purchasing in Maryland. This program offers competitive rates when compared to other loan terms. To gain full access to the program, applicants must qualify as first-time buyers, however, those not technically considered first-time buyers can still qualify in specific areas in Maryland. This program is intended to assist those who can’t quite afford to purchase their first home as income limits and purchase price caps apply.
Maryland SmartBuy 2.0 Program
The Maryland SmartBuy 2.0 Program assists home buyers that have qualifying student debt in purchasing a home through the Maryland Mortgage Program and deals with homes that are owned by the state of Maryland. It does so by financing up to 15% of the home purchase price for the borrower to pay off their remaining student debt. This helps veterans who have outstanding student debt and are attempting to finance a home.
Disabled Veteran-Friendly Maryland State Tax Credit For Adaptive Housing
For veterans with service-related disabilities, the disabled veteran-friendly Maryland State Tax Credit for Adaptive Housing is a program that offers tax breaks for expenses spent on home improvements necessary for adapting the residence to be suitable for the disability. These can include any adaptations to a home that assists in making the disabled person more independent or improving daily functionality. Utilizing this tax credit can add up to immense savings on your annual tax returns.
Property Tax Exemption
Last but certainly not least is the property tax exemption for disabled veterans. This exemption applies to veterans with a service-related disability that is rated 100% by the Veterans Administration. It entails a total exemption from property taxes on the dwelling and surrounding yard. Some un-remarried surviving spouses may also be eligible and spouses of service members who lost their lives in the line of duty indefinitely are eligible.
Maryland VA Loan to That Help You Succeed
Taking advantage of the many mortgage benefits available for veterans, along with the generous offerings that come with a Maryland VA loan, veterans enjoy a major edge in being able to pay for a mortgage. Using these benefits paves the way for a successful mortgage loan and makes the entire process lighter of a burden on veteran home buyers. When searching for a Maryland VA loan be sure to find a mortgage broker that finds the best deals for you. Federal Hill Mortgage will be by your side every step of the way, ensuring that we secure the best rates for the home of your dreams. Apply now today to get started on your mortgage journey!