I’m sure it comes to no surprise to you that today’s economic climate is difficult to navigate when looking to buy a home, perhaps especially for veterans.
It can be overwhelming considering that many types of loans for veterans that are out there.
We know what to do and what not to do when buying a home. A VA mortgage loan can be a great option for veterans and their families, and we’ll help explain why.
What are VA Loans for veterans?
A VA (Veterans Administration) Loan is a mortgage loan provided to American veterans of the armed forces.
This loan is popular amongst other types of loans for veterans because there is no required down payment as well as no private monthly mortgage insurance.
This loan can be used towards:
- purchasing a home
- building a home
- refinancing an existing mortgage
Benefits of a VA Loan
I’ve briefly mentioned a couple of the benefits of VA loans, but let’s look at those benefits a little more in depth.
No required down payment
Down payments can often amount to 5% of the loan, which can be extremely costly to provide upfront.
No required down payment is a great option for veterans and military families who cannot afford to provide a down payment on a mortgage, or who might want to save that cash for something else.
This doesn’t mean that you can’t provide a down payment (in fact, if you do anyway it could decrease the funding fee), but it’s a great option for those looking to own without a lot of cash on hand.
No required mortgage insurance
Many conventional loans require borrowers to have expensive private mortgage insurance.
Instead of this, VA loans have an upfront funding fee that goes to supporting the VA Loan program.
Low interest rates
VA loans have a lower average interest rate than other types of loans, which will save you money in the long run.
Limited closing costs
“Closing costs” is a general term for a myriad of extra charges you can face as a loan borrower as you are finalizing a loan.
The great thing about VA loans is that the VA loan program actually limits the amount of closing costs you as the buyer would have to pay (even not allowing certain fees to be paid by VA loan borrowers).
Getting Approval
Once you’ve reviewed all the information and have decided this is the loan for you, it’s important that you are both eligible and are able to get approval for the loan.
First, you should get a certificate of eligibility from the VA. You should also have a sufficient, steady income as well.
Finally, they will check your credit score.
Be careful to not spend too much right before you apply for the loan, as this can negatively affect your credit: stay away from other large purchases (like a car for example) until after you’ve secured the loan.
Conclusion
VA loans can be an excellent option for veterans looking to own a home, especially considering this program’s success.
We understand that loans and mortgages can be daunting and overwhelming.
Hopefully this information has helped you to understand one option for you and your family.
Share this article if you found the information helpful, and if you have any questions, feel free to reach out to us!