US Military Loans: What You Need to Know About
If you don't understand the rules; military loans can be as scary as jumping out of a plane or entering boot camp. There are a number of loans that fall under this leading. They include VA Loans, military advanced pay loans, instant military loans, bad credit military loans and many more. The VA Loan is an old standby trusted for decades to help service men and women buy affordable housing. Investigate other types of military loans before making an informed choice.
You can apply for a VA loan with no down payment if your loan request is $417, 000 or less. If you want a little more luxury a VA loan can cover a million dollars; however, you must pay 25 percent down on the amount over $417,000. Considering the value of homes in some areas of the country a loan could easily top the maximum. These larger loans are called Jumbo Loans.
Eligibility for VA Loan
You are eligible for VA loan benefits if you served on active duty in the Army, Navy, Air Force, Marine Corps, or Coast Guard and were honorably discharged. You will need a Certificate of Eligibility, VA form 26-1880. The lending agency may help you to obtain this form.
There are also rules about time in service and when you served. Under some circumstances you can qualify if your discharge was due to a service connected disability. For detailed information on eligibility information go to www.valoans.com/eligibility.cfm .
Put Your Credit in Order
As with all home loans, you must have a positive debt ratio. Therefore, if you want to buy a home and your credit isn't as perfect as you would prefer, you may want to start improving it. The maximum debt ratio is 41 percent, so start paying off credit. Staying with just one credit card for 6 months and paying off large items (such as a car) will help turn that ratio in your direction. You could also increase your income to improve your debt ratio, if that is possible in your situation.
Pioneer Military Lending
I was immediately impressed by this lender because they proudly announce the following credibility builder, 'Pioneer Military Lending offers a no-questions asked, no-cost 15-day guarantee. We encourage you to take your military loan to your chain of command, your financial advisor or other financial institution. If you can find a better alternative, or even if you decide that the money is no longer needed, the money can be returned within 15 days at no cost.' It might be informative to take them up on this if you are investigating financial solutions.
According to their site www.pioneermilitarylending.com they have been serving the military for 20 years. In their experience the traditional credit score is not particularly useful when evacuating the credit worthiness of military personnel. Consequently, they have developed a unique credit scoring system that takes the military life style into consideration.
Not all lending institutions are humanitarian in their practices. Pioneer calls these unscrupulous lenders predatory. Their definition of predatory is 'predatory lending is a 'practice,'... Predatory lending can be defined as triple-digit annual percentage rates or practices that generate excessive fees, or deliberate deception to conceal the nature of the transaction from unsophisticated borrowers.'
They specialize in loans from $500 to $10,000. Pioneer advertizes competitive interest rates, fixed payments and the absence of hidden fees.
Other Loans Listed as Military or Armed Forces Loans
I looked at a number of websites for military loans, bad credit military loans, pay advance loans and I found one common factor that disturbs meâ€¦ none listed their interest rates. I emailed two of the lenders asking for the interest rate and did not receive a reply.
It is important to know that the Veterans Administration is not affiliated with these lenders. The Veterans Administration guarantees VA loans. Therefore, there is a difference. Do not assume a relationship unless you have indisputable evidence.
Though it appears to be easy to apply online, by phone or fax and they have lovely military pictures on their sites --- know what you are getting and how much it will cost before applying.
Also, be aware that you have rights as a member of the armed forces. The Talent-Nelson amendment imposed restrictions on certain types of consumer lending. The most significant restriction is a 36 percent APR cap on loans to Service members and their dependents, protecting military families from excessive APR rates. I am pleased to see this safeguard. However, 36 percent is still very high.
The National Military Family Association Website
For more credit information and guidance go to the National Military Family Association homepage at www.nmfa.org. They have a special service called Money and You. It will be helpful in pointing you in the right direction - financially speaking.
The NMFA professionals offer the following advice for responsible credit use (from money.cnn.com):
- Pay your bills on time
- Keep balances low on credit cards
- Don't open a number of new credit cards that you don't need
- Have credit cards - but manage them responsibly
- Closing an account doesn't make it go away
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