By – Anya Martin
In his 30-year career with the Air Force, Chief Master Sgt. Jim Roy and his wife, Paula, lived in 12 different homes. When Mr. Roy retired last year, the couple settled down in a home of their own—with a little help from the VA.
Charmed by the friendly people and mild winters, the Roys decided on the Charleston, S.C., area. They found a four-bedroom, 3½-bath house for themselves and their 14-year-old twin boys, Caleb and Colby. “My wife and I saved for 31 years, and this is the house we wanted to be in,” Mr. Roy, 50 years old, says.
The house, built in 2008, had a purchase price of $575,000, which normally would require a jumbo mortgage and a 20% down payment because it exceeded the area’s $417,000 limit for conventional loans. (That limit can reach $625,500 in some high-price areas.) However, as a veteran, Mr. Roy qualified for a mortgage guaranteed by the Department of Veterans Affairs.
VA home loans are available through banks and other private lenders. As with other mortgages, interest rates of VA-guaranteed loans can be either fixed or adjustable, depending on the lender. Down payments are low, if required at all. Private mortgage insurance requirements are waived as well. The loans can be used only on primary residences and not on secondary or vacation homes.
The Roys got their mortgage through Columbia, Mo.-based Veterans United Home Loans, a national lender that specializes in VA loans. If they had borrowed less than $417,000, no down payment would have been necessary. By going above this threshold, they had to make a down payment that was 25% of the portion that exceeded the limit. Their $575,000 purchase exceeded the limit by $158,000, so the Roys were required to put down $39,500. The Roys put down a little extra to lower their monthly payments and got a 30-year, fixed-rate mortgage at less than 4% APR.