The Benefits of VA Home Loans: 10 Things You Might Not Know

Have you considered applying for a VA home loan but talked yourself out of it? Perhaps you’re worried about the costs, for example? Before you decide it’s not for you, check out these ten facts you might not know about them. There are many benefits of VA home loans that might change your mind.

There’s No Need To Worry About a Down Payment

You don’t need to save a large down payment for your VA home loan. You don’t need a down payment at all—it’s not required. Compare this to a requirement of at least 3% to 3.5% for FHA and conventional home loans.

You Don’t Have to Pay Mortgage Insurance

Mortgage insurance can significantly drive up the monthly cost of home loans, but none is required for VA loans. Not having this cost on your loan could shave a significant amount off your monthly mortgage payment.

You Do Need To Pay a Funding Fee (Unless You’re Disabled)

For VA loans, you’ll be required to pay a percentage of your loan amount as a funding fee. It’s a one-time payment that helps fund VA loans for future home buyers.

Disabled veterans and veterans eligible for disability compensation may qualify to have this fee waived. Otherwise, the fee is up to 3.6% of the loan amount.

You Can Get a Lower Interest Rate

Interest rates are at a record-low across the country, but they’re even lower for VA loans. That’s because interest rates reflect risk and the VA backing significantly reduces that risk for lenders.

You’ll Find That Lenders Are More Lenient

Even when risks are higher (such as when a borrower has a bankruptcy on their record or a low credit score), lenders are generally more lenient with VA loans. This is because both lenders and the VA tend to understand the effect of active duty and re-assimilation on credit scores.

It’s a Reusable Benefit

Military persons and veterans often hold off using their VA loan benefit because they want to save it for the right purchase. However, the benefit can be used more than once. Once you repay a VA loan (by selling your home or paying it off early or once the loan is due), you can take out another VA loan to make another purchase.

You Have Options

Although you cannot use your VA loan to purchase a second home or investment property, you can buy a duplex or quadruplex in some cases. It’s also an excellent option for refinancing and tapping into home equity.

Your Loan Is Through a Private Lender

You don’t apply for a mortgage through the U.S. Department of Veterans Affairs. The VA only provides a certificate of eligibility proving honorable discharge. It’s local or nationwide private banks that extend the loan to you. Credit unions also offer VA loans.

There’s No Expiration

Veterans often believe that if they’ve left the military long ago, they’re no longer eligible. However, this benefit never expires. So even if you served 50 years ago or more, you can qualify for a VA loan.

Survivor Eligibility

Surviving spouses of military persons who died in the line of duty may become eligible to use the VA benefit to purchase a home. The caveat is that the surviving spouse must remain un-remarried to access the benefit.

I’m Interested!

Are you ready to leverage these great VA home loan benefits? Request rates from MacAsh Home Loans today!