If you’re a veteran or active duty service member, you may be wondering if a VA loan is the right choice for you. Here are some of the key benefits of a VA loan that you should consider:
– No down payment required
– More flexible credit requirements
– Competitive interest rates
– No private mortgage insurance required
Talk to a loan officer to see if a VA loan is right for you.
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A VA loan is a mortgage loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to eligible veterans, active-duty service members, reservists, and certain surviving spouses. The VA loan program was created to help veterans and other eligible borrowers finance their home purchases with favorable loan terms and at competitive interest rates.
VA loans are usually issued by private lenders, such as banks, credit unions, and mortgage companies. The VA guarantees a portion of the loan, which protects the lender against loss if the borrower defaults on the loan. This guarantee allows lenders to offer VA loans with more favorable terms than they would otherwise be able to offer.
The main benefit of a VA loan is that it allows eligible borrowers to finance 100% of their home purchase. This means that no down payment is required. In addition, VA loans do not require private mortgage insurance (PMI), even if the borrower does not make a down payment. PMI is an insurance policy that protects the lender against loss if the borrower defaults on the loan.
Another benefit of a VA loan is that it offers eligible borrowers access to competitive interest rates. Interest rates on VA loans are typically lower than interest rates on conventional loans. This can save borrowers a significant amount of money over the life of their loan.
Finally, VA loans come with a number of built-in protections for borrowers. For example, if you are called up for active duty service or deployed overseas, you can apply for a Temporary Residency Allowance (TRA). This allowance will allow you to make reduced payments or no payments at all for up to 12 months. In addition, if you experience financial hardship after your home purchase, you may be eligible for forbearance or modification of your loan terms through the Veterans Affairs Hardship Program
What is a VA Loan?
A VA loan is a home loan that is guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is available to eligible veterans, active duty service members, reservists, and certain surviving spouses. The VA loan program was created to help veterans and their families purchase homes with favorable terms and at affordable rates.
The VA loan program offers many benefits to eligible borrowers, including:
-No down payment is required.
-The borrower can finance 100% of the purchase price of the home.
-There is no monthly mortgage insurance premium required.
-Closing costs can be included in the loan.
-The interest rate on a VA loan is typically lower than the interest rate on a conventional loan.
-VA loans are available for both purchase and refinance transactions.
The Benefits of a VA Loan
A VA loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs (VA). The loan is issued by a qualified lender. The VA loan allows veterans to purchase a home with no down payment or private mortgage insurance (PMI). VA loans also offer competitive interest rates and flexible credit requirements.
No down payment
The biggest advantage of a VA loan is that they require no down payment. In fact, you can finance up to 100% of the purchase price of the home. This means that you can buy a home with no money out of your own pocket.
No private mortgage insurance
One of the biggest advantages of a VA loan is that you won’t have to pay for private mortgage insurance, or PMI. PMI is insurance that protects the lender if you don’t make your payments and default on your loan. VA loans don’t require PMI because the government guarantees them. This can save you hundreds of dollars each month and thousands of dollars over the life of your loan.
Lower interest rates
Interest rates are generally lower with a VA loan than a conventional loan. This is because the Veterans Administration guarantees a portion of the loan, which protects the lender against loss if you default on the loan. The VA guarantee makes it easier for lenders to offer lower interest rates on VA loans, saving you money every month on your mortgage payments.
More flexible credit requirements
For buyers with less than perfect credit, a VA loan might be the best available choice. VA loans don’t require a minimum credit score, and they’re available to eligible borrowers with a wide range of incomes and employment histories.
Other types of government-backed loans, such as FHA and USDA loans, do have minimum credit score requirements. And conventional lenders often require higher credit scores than they do for buyers using VA financing.
If your credit isn’t very good, you might still qualify for a VA loan if you have what’s known as nontraditional credit history. That could include things like on-time rental payments or utility bills, or even regular payments for things like auto insurance.
We hope this guide has helped you understand the benefits of a VA loan. If you’re a veteran or active duty service member, we encourage you to take advantage of this incredible program. If you have any questions, our team at Veterans United is here to help. Give us a call today.