VA Loan Benefits
No Down Payment
The fact that there is no down payment is one of the main advantages of a VA home loan. That’s correct: No down payment of any size is necessary if you qualify for a VA loan. This may make it simpler for many people to not just buy a home but to do it sooner as well.
Even buyers with the highest credit scores need at least 3% to 3.5% down for other mortgage alternatives including FHA loans and conventional loans. Therefore, a typical buyer would want a down payment of at least $7,500 on a $250,000 house. VA customer? They would have no need.<br>
No PMI
The upfront financing cost for VA homeowners looks like this:
| Down Payment | First VA Loan | Subsequent VA Loans |
|---|---|---|
|
$0 Down |
2.15% |
3.3% |
|
3.3% |
1.5% |
1.5% |
|
10% or more |
1.25% |
1.25% |
Lower Interest Rates
It’s true that of all loan kinds, VA loans have the lowest average rates. A reduced interest rate, too? You might save a lot of money in the long run and on your monthly payment if you do that.
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Relaxed Credit Requirements
A Lifetime Benefit + Second-Tier Entitlement
Your VA loan benefit won’t expire as long as you fulfill the service requirements, and in some circumstances, you could even be qualified to carry multiple VA loans concurrently. When you purchase a new home, you can again use the VA loan advantage.
No Loan Limits
VA loans don’t have predetermined limits. Instead of paying a down payment, you can borrow as much as you require (and can afford, of course).
Remember that your lender will still need to assess your financial situation to make sure you can afford the loan you’re looking for. To see how much you might be able to borrow, use this calculator.
VA Loan Assumability
If you subsequently sell your home, someone else may be able to assume your VA loan since it is assumable. Of course, the VA and lender must approve them, but if they qualify, it might result in significant advantages. They would receive your reduced interest rate, for starters!
In some situations, this can also enable your spouse to assume responsibility for your mortgage in the event of an unexpected event.
The VA Appraisal
The VA aims to ensure that Veterans and active duty service members buy secure, risk-free, and entirely livable houses, and the program’s extremely stringent assessment procedure guarantees that all VA-financed properties are in good shape. You may be confident it’s a safe place to live if you purchase a house that passes a VA assessment.
VA Loan Refinancing
Once you have a VA loan, you have two options for future refinancing: the VA cash-out refinance or the Interest Rate Reduction Refinance Loan. These may enable you to convert your equity into cash or cut your interest rate and monthly payment. The latter might be wise if you need to pay for house upgrades or if you have unexpected costs, like medical bills.
How to Take Advantage of VA Home Loan Benefits
To take advantage of all these VA loan benefits, you must first fulfill the VA’s stated standards for military service.
These consist of:
- Having completed 90 days of continuous active duty during a conflict,
- 181 days of continuous active duty during peacetime,
- 6 years in the National Guard or Reserves, or
- Be the spouse of a military person who passed away in the line of duty or suffered a disability as a result of their service.
In addition, you must fulfill the credit score and other standards set forth by your VA lender. Find out more about VA loan eligibility right away, or if you believe you may qualify, get your VA Certificate of Eligibility right away.
Compare VA Lenders
A VA loan has several advantages, but keep in mind that only lenders who have been approved by the VA may provide these loans. Are you thinking about getting a VA loan to buy a house? See how the most well-known VA lenders do below: