Many active duty members and veterans of the United States military could be able to qualify for a VA loan to help purchase a home or to refinance a home that they already own. Many do not realize that they could qualify, and many more still are not aware of just how beneficial these types of loans can be, particularly when compared with other types of loans.
What Advantages Do VA Loans Have?
Loans from the Department of Veteran Affairs can offer buyers savings in a number of different areas, and can help military personnel to get into homes without a large down payment. In many cases, veterans will be able to borrow up to $147,000 for their home without the need for any down payment at all. This amount can vary based on location in the country as well, so it’s a good idea to speak with a real estate professional about the limit in the area where you hope to buy. For those that do go over this limit when buying, many lenders will require a down payment, although it’s only $1 for every $4 they borrow.
Often, the interest rates are somewhat lower on the VA loans when compared with conventional loans. The national average for a 30-year VA loan was shown to be 3.59%, approximately 60% less than a traditional loan. While this may not seem like a large amount, consider the savings over the life of the loan. It could be substantial.
Additionally, with loans for more than 80% of the appraised value of the property, there is no need for private mortgage insurance. This has the potential to save owners a couple of hundred dollars each month. They have limits on the closing costs, and there is no minimum credit score required. Another great advantage is that there is no prepayment penalty for those who pay off their mortgage ahead of time, as there is with some traditional loans.
You can use the loans to buy a home or condominium, build a home, purchase and improve a home simultaneously, improve a home with energy efficient changes, or to buy a manufactured home or even a lot.
More Buyers Considering VA Loans
With all of the advantages they can offer, it is with little wonder that more and more vets and military members are looking into getting loans through the program. However, the program has actually been around since 1944. The VA Loan Guarantee Program was meant to help those coming back from the war, and all of the military service members who followed. It’s a way of ensuring that those who gave for the country are able to have some help when they need it.
Is a VA Loan Right for You?
These loans are a fantastic option for service members who want to become homeowners. They do not have to have perfect credit, and even those with lower incomes may still qualify for a VA loan. These loans are a fantastic opportunity for many who may not be able to get other types of loans and who worry that they cannot become a homeowner. However, it may not be the right choice for everyone. It may still be possible to get better quality loans if you have great credit and a large down payment that you can use. It all depends on individual circumstances.
Before making a decision, it’s a good idea to speak with a home loan specialist about the best course of action. They can help to guide you in the right direction and make sure you choose the loan that’s right for you and your finances.