Things Veterans Don’t Know About VA Loans
Finding and securing an affordable home loan can be overwhelming.
Fortunately, the U.S. government has streamlined the process for the brave men and women who have served our country.
More than 20 million military families have benefited from the Department of Veterans Affairs mortgage assistance program. You and your loved ones could be next.
Keep reading to learn about the benefits of VA loans.
Flexible, Accessible, and Easy to Apply For
The VA mortgage program was designed to help service members purchase homes without having a large down payment or excellent credit.
VA home loans apply to traditional houses, condos and manufactured housing. You may use your loan to purchase a home or refinance your existing one. Disabled veterans may also borrow funds to make modifications to their home.
This program is open to veterans, National Guardsmen, active duty personnel and surviving spouses.
There are fewer qualifications for obtaining a VA mortgage loan than there are for conventional funding. The necessary qualifications include:
- A certificate of eligibility
- Proof of sufficient income
- A reasonably good credit score
- Certification that you will live in the home
- Other applicable documents
No Down Payment? No Worries
Many home loan programs may require a down payment as high as 20 percent. The VA loan is an exception.
With a VA loan, no down payment is required as long as the sales price doesn’t exceed the appraised value. Additionally, you can finance up to 100 percent of the purchase price.
No Need for Private Mortgage Insurance
Typically, if you make a down payment that is less than 20 percent, lenders require you to pay for mortgage insurance. This insurance protects the lender in the event that you default on your loan.
With VA loans, mortgage insurance is not required, making these loans very affordable from the start.
Lower Interest Rates
The federal government guarantees that a portion of these loans will be repaid to the lenders, even if you can’t make your monthly payments.
This guarantee gives lenders the flexibility to offer more attractive interest rates.
Added Benefits and Protection
VA loans are not offered or funded by the VA. Instead, they are offered by banks, credit unions, and mortgage lenders.
The government allows each institution to set their own VA loan rates and fees, meaning you can shop around and compare different loan offers.
VA mortgages also come with additional benefits, such as no prepayment penalties. A VA loan won’t restrict your ability to sell your home and there is no early-exit fee. You can also refinance your existing VA loan or switch to a non-VA loan at any time.
Explore Your Options Today
VA loans can help minimize your risk without limiting your options. The VA loan is one of the lowest-risk mortgage types available.