VA home loans are a popular choice among eligible first-time home buyers due to the exceptional benefits they offer military borrowers.
A VA loan is a mortgage guaranteed by the U.S. Department of Veteran Affairs. A VA loan is a mortgage that requires the applicant to be an active duty service member or veteran.
- Benefits of an VA Loan are:
- VA Mortgage Loans are guaranteed without a down payment for up to $417,000
- No monthly Homeowners Insurance is required
- Many VA Mortgage Loans are assumable
- VA mortgage loans can be refinanced.
- VA loans offer more lenient qualifications than conventional loans.
- No Money Down Up to $417,000 – You do not have to put any money down to qualify for a VA Home Mortgage Loan for up to $417,000. If a seller agrees to pay the closing costs on a VA Home Mortgage Loan, you may be able to purchase the home with no out of pocket costs.
- The VA Funding Fee – The Veterans Administration assesses a Funding Fee to all VA loans between .5% and 3. The fee is added to the total amount of the loan and is to be paid over the life of the VA loan. Disabled veterans may qualify to get the fee waived.
- Assumable VA Mortgage Loans – VA loans are assumable. If the person assuming the mortgage is a veteran with VA eligibility, the original veteran will not be giving up the amount of eligibility that they used to get the loan at the beginning. Veterans should be careful about letting someone else take over their mortgage, as it is a big benefit for them.
- Qualifying For A VA Mortgage Loan – The VA offers excellent qualifying standards. The VA doesn’t use credit scoring in their analysis of the loan. Even if you’ve had some financial difficulties recently, it’s possible for a veteran with good payment records over the last year or so to qualify and receive assistance at an attractive rate that is much cheaper than traditional loans!
- VA Mortgage Loans May Be Refinanced – VA mortgage loans have built in features allowing a loan to be refinanced to a lower interest rate without all of the criteria normally associated with a conventional loan. This is called an Interest Rate Reduction Loan; the veteran can secure a lower interest rate without any credit checks, appraisal, and income or asset verification and can roll the costs of the transaction into the loan so there are no out of pocket costs.
