If you’re in the military or a veteran and thinking about buying a home, VA loans (Veterans Administration) are an excellent borrowing option. It’s an affordable option that could be the first step to you owning the home of your dreams. However, you may not be familiar with all the in and outs of this loan option.
What is a VA loan?
First things first. What is a VA loan? What makes it different from other loans? A VA loan is a mortgage loan that’s made possible through the United States Department of Veteran Affairs.
These loans are available to both active duty members and veterans, as well as surviving spouses. They require no down payment and are easy to qualify for. Some more good news — there is no official minimum credit score requirement needed for this loan! Whatever your situation, there are three types of VA loans available for you: purchase loans, refinance loans (VA streamline refinance loans), and cash-out refinance loans.
Benefits of VA Loans
Compared to other loans, VA loans are an excellent option. Here are just a few benefits of a VA loan compared to other loans.
- No down payment required
Instead of paying thousands of dollars for a down payment, 100% of the purchase price of a home can be financed.
- No mortgage insurance
Lenders usually require mortgage insurance to protect them if you haven’t paid your loan. However, VA loans don’t require a down payment, so mortgage insurance isn’t required either.
- No requirements on private mortgage insurance premiums
- Government guarantee
If for some reason you can’t pay a portion of the loan on a monthly basis, the government will be responsible.
- Offers competitive rates
Because mortgage lenders have an extra layer of security in knowing their loan will not be defaulted on, they can be more flexible and offer lower interest rates.
- Easy to qualify for
All loans require some documentation, but VA loans are much more flexible compared to traditional loans. Lending intuitions are more generous and adaptable when it comes to VA loans, because there’s a lower risk.
- No prepayment penalties
You can save money by paying off your loan as early as you’d like, unlike other loans. This is because many loaning establishments want to make as much interest grow over time as they can. However, since VA loans are guaranteed to be paid by the government, this isn’t an issue.
- You’ll save on closing costs.
You can potentially save thousands on closing closets. For VA loans, the seller, or lender, will typically be responsible for closing costs.
As long as you are a veteran, on active duty, a reserve member, National Guard member, VA loans are a great option to take into consideration. This is an affordable way to own the home of your dreams!
When looking for a lender, be sure to choose a company with a proven track record. HomeRate Mortgage is a veteran-owned business, and it brings us to joy to serve fellow servicemen. We offer quick quotes, low rates, and fast closing times! Call us at 844-805-9100 for more information or fill out this form for a quick quote.