7 Perks of a Veterans Loan

If you are a veteran and served this country, first off thank you for your service! You’ve earned the benefit of having access to Veterans loans, also called VA loans, to refinance or to buy a home.

The VA home loan offers unbeatable benefits for veterans. It is backed by the U.S. Department of Veteran Affairs and is designed to help active military personnel, veterans and certain other groups become homeowners at an affordable cost.

We’re going to go through the benefits. But here’s the key important facts: The VA loan asks for no down payment. It requires no mortgage insurance and has more lenient rules about qualifying.

Benefit #1: No Down Payment

Most home loan programs require that you make at least a small down payment to buy a home. The VA home loan is an exception. Rather than paying 5%, 10%, 20% or more for the home’s purchase price, the VA home loan allows you to finance 100% of the home.

Benefit #2: No Mortgage Insurance

Typically, you are require to pay PMI, or Private Mortgage Insurance, if your down payment is less than 20%.

PMI protects the lender if you default on your loan. VA loans require neither a down payment or mortgage insurance. That makes this VA back mortgage very affordable upfront, and less expensive monthly.

Benefit #3: Government Guarantee

That means the federal government guarantees to lenders that a portion of the loan will be repaid to the lender even if you’re unable to make monthly payments for any reason. There’s a reason why the VA loan comes with such great terms and no mortgage insurance.

Benefit #4: Variety of VA Mortgages

With Vas, you have flexibility. You can use your VA loan to buy a house, a condo, a new home, a manufactured home, a duplex and other properties.

You also have the option to use your VA loan to refinance your existing mortgage, make repairs or improvements on your home or make your home more energy efficient.

Benefit #5: Easier to Qualify For

Like all mortgage types, the VA home loan requires specific documentation, an acceptable credit history and sufficient income to make your monthly payments. But as compared to other loan programs, the VA loan guidelines tend to be a little more flexible. Again, a special benefit for military members.

Benefit #6: Closing Costs are Lower

The VA limits the closing costs that lenders can charge to VA loan applicants. What this means for you is that buying a home with a VA is less expensive up front, and you’ll be charged less fees. Often times, people use the money saved for decorating, furniture, moving costs, home improvements or anything else.

Benefit #7: VA Loans are Assumable

This one is not often as well known, but it could be a huge deal when selling your home. If a loan is assumable, it means you can transfer your VA loan to a future homebuyer if that person is also VA eligible. It’s a unique and huge benefit when you go to sell your home in the future.

If your home loan today has a low rate and market rates rise in the future, the assumption feature of your VA home loan becomes even more valuable.