Military veterans have a huge advantage when buying their first home because the VA loan requires no down-payment. VA loan programs require no monthly mortgage insurance either. Having the ability to buy a house with zero down and low interest rates, make VA loans attractive for qualified veterans.
If you are serving or have served in the armed forces, then your timing couldn't be any better. The interest rates continue to break records and affordability maybe has never been better to buy a home in many of the states in the U.S. We suggest determining how much you can afford before you start shopping with a realtor. It does not hurt to have a pre-approval letter signed by a trusted mortgage company either.
Our service is simple, after you complete the form, we match you with lending sources that best meet your needs and credit profile in the neighborhoods that your desire buying a home. Please complete the application and our system will make every effort to match your request with VA approved mortgage lenders at no cost.
There are approximately 22 million veterans in the US, and most of them are eligible for VA loans. There are many advantages to VA (Veteran's Administration) loans. This article will break down these advantages of the Veterans Affairs Home Mortgage Loan Program, and also offer some considerations if you thinking about a VA loan.
But first, let's take a close look at how the VA loan works.
VA Loan Basics
#1 Interest Rates Are Lower
Veterans from the US armed forces can enjoy rates that are a bit lower than conventional loans. For example, last year, the national VA mortgage loan average was approximately 3.59%, which was around .5% lower than the national average for conventional 30 year mortgages.
#2 No Down Payment
If the purchase price of the home does not go over the appraised value, there is no down payment requirement. This zero down home loan can save you as much as 20% of the loan value, compared to a conventional loan.
#3 No Private Mortgage Insurance Needed
If you do a low money down conventional loan of more than 80% of the homes appraised value, you must buy private mortgage insurance until you have 20% equity in the home. This can save you $200 per month in insurance costs.
#4 Closing Costs
There are strict limits on closing costs for VA loans. In most cases the closing costs are competitive. Most VA loans have a one-time .5% funding fee. However, disables veterans may be eligible for a VA home loan with no funding fee. Check with the loan officer to determine your eligibility.
#5 Credit Score
There is no minimum credit score needed. The VA will not deny your loan just based upon a low FICO score. Most lenders for VA loans will not tier the interest rates based upon score, either. Usually, the VA program just looks at the last 12 months of credit history. More important than credit score is documenting the proof that you have the income to repay the loan. However, guidelines are usually more flexible than for many conventional loans. Not all VA approved brokers will offer bad credit home loans, but some will so make sure you are shopping with a lending company that supports your credit.
#6 No Prepayment Penalty
Want to pay off your mortgage early? You can do so and not pay any extra fees or interest.
#7 Payment Help Available
If you get a VA loan and start having trouble making payments, the VA can negotiate with the lender on your behalf. They can help you to negotiate a repayment plan, a loan modification or options other than foreclosure.
There are also some challenges and considerations with VA loans:
The Bottom Line
A VA loan is often a very good option for military home buyers in the US. Because they are easy to qualify for and have no money down options, the VA mortgage loan program could be the right choice for you if you are a military veteran. 11 Reasons Why the Military Has an Edge with Guaranteed VA Mortgage Programs
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