Question

Which of the following statements is NOT accurate regarding Cal-Vet loans?The required down payment is 10%-12% of the sales price or appraisal value, whichever is higher.Monthly payments on a Cal-Vet loan include all of the following items (but nothing additional): principal and interest; 1/12 of the annual property taxes; hazard insurance; disability; and life insurance premiums.CalVet requires a structural pest control report and a roof inspection on properties it finances.The loan is made directly from the state to the veteran.

Answer 1

The inaccurate statement about Cal-Vet loans is that a required down payment is 10%-12% of the sales price or appraisal value, with actual rates possibly being lower. Monthly payments include various items like principal, interest, and possibly insurance premiums, depending on the loan terms.

Step-by-step explanation:

The statement regarding Cal-Vet loans that is NOT accurate is that 'The required down payment is 10%-12% of the sales price or appraisal value, whichever is higher.' While it's common advice to make a down payment of around 20% on a home to avoid mortgage insurance, many home financing options, including those for veterans like Cal-Vet loans, may offer lower down payment options, sometimes as low as 0-3.5%. Additionally, mortgage insurance is usually required when down payments are lower, which can increase the total cost over time.

Monthly payments on a Cal-Vet loan typically include items such as principal and interest; 1/12 of the annual property taxes; hazard insurance; and possibly other insurance premiums if they are a part of the loan terms. Cal-Vet does have requirements for inspections such as structural pest control and roof inspections to protect the investment of both the lender and the borrower.

The loan in a Cal-Vet program is indeed made directly from the state to the veteran, which makes it a unique offering compared to conventional loans.

Answer 2

The NOT-accurate statement about Cal-Vet loans is regarding the required down payment, as general mortgage advice suggests a 20% down payment, but Cal-Vet terms could differ. Cal-Vet loans indeed include monthly payments for principal, interest, and insurance, and they require inspections.

Step-by-step explanation:

The statement that is NOT accurate regarding Cal-Vet loans is that the required down payment is 10%-12% of the sales price or appraisal value, whichever is higher. While a general rule for traditional mortgages suggests a 20% down payment, down payments can sometimes be as low as 0-3.5%, albeit usually requiring mortgage insurance. This is due to the lenders' necessity to minimize risk and ensure that borrowers have the financial capacity to meet their mortgage obligations.

As for the Cal-Vet loans, in specific, they are designed to assist veterans in purchasing homes with favorable loan terms. Cal-Vet loans do require a structural pest control report and a roof inspection on financed properties, and monthly payments typically include items such as principal, interest, a portion of the annual property taxes, and insurance premiums.

Therefore, special loan programs like Cal-Vet may have different terms and down payment requirements compared to conventional mortgage loans. When considering such programs, it is important for potential homebuyers to understand the specific guidelines and costs associated with the mortgage structure, including the possibility of additional insurance fees if the down payment is below a certain threshold.