7 Main Advantages of a VA Loan
Estimated reading time: 6 minutes
There has been an increasing amount of demand for VA Loans. Technically, they’re called Veterans Affairs mortgages.
Better known as VA loans, these mortgages don’t always require a down payment and are available to military vets and active members.
Some unique features about VA loans are that they do not require mortgage insurance, and there’s no minimum credit score requirement needed to get one.
As of now, VA loans are one of the very few mortgage options for borrowers who don’t have the money for a down payment.
If you’re a veteran or are in active service and are thinking about applying for a VA loan, here are some of the main things you should know about the program.
First, am I Eligible for a VA Loan?
If you’re a member of the military, a veteran you are most likely eligible to apply. Additionally, most citizens on reserve and apart of the National Guard are also eligible.
It is important to know that not only service members are eligible to apply, but also spouses of military members who had died on active duty or as a result of some sort of service-related disability.
VA loan benefits are extended to surviving spouses under certain conditions.
- The surviving spouse has not remarried.
- The surviving spouse has remarried but since divorced and is now unmarried.
- The surviving spouse has remarried but the marriage ended due to death of the spouse
Active-duty members can qualify after roughly six months of service. Reservists and National Guard members must wait six years to apply. If, however, they are called to active duty before that time, they can gain eligibility after 181 days of service.
If you’re looking to apply for a VA Loan, one of the first things you need to do is obtain a certificate of eligibility. Conveniently, you can submit this online.
You don’t have to have your Certificate of Eligibility immediately to start the process of getting a mortgage. Most of the time, a lender can obtain this for you during the pre-approval phase.
A Certificate of Eligibility, or COE, verifies to the lender that you are eligible for a VA-backed loan. A COE will tell you what VA entitlement you possess, which is the percentage you qualify for in terms of your home loan. Read more about this process here.
The 7 Main Advantages of a VA Loan
1. No down payment is required in most cases. Conventional loans typically require a 5 percent downpayment, and FHA loans require 3.5 percent.
However, they still carry a one-time funding fee that varies, depending on the amount of the down payment and the type of veteran.
2. No monthly mortgage insurance premium to pay. FHA loans come with both an upfront and an annual mortgage insurance charge.
Conventional buyers typically need to pay for private mortgage insurance unless they’re making a down payment of 20 percent or more.
However, here is the VA Funding Fee. The fee is usually about 2 percent of the loan amount. This is necessary because it helps the VA keep the program going and is required on both purchase and refinance loans.
3. Buyer’s closing costs are limited. Sellers can pay all of a buyer’s loan-related closing costs and up to 4 percent in concessions.
4. Lower average interest rates than other loan types. VA loans continue to have the lowest average interest rates of all loan types.
5. No prepayment penalties. VA buyers can pay off a loan early without any financial penalties.
6. Mortgages are assumable. Typically, though, this is subject to VA and/or lender approval. You may be able to have someone take over your mortgage payment, which can be a big benefit in a time of rising interest rates.
7. The VA loan program provides foreclosure avoidance advocacy. The Veterans Association has staff members who advocate on behalf of homeowners to find alternatives in the case of foreclosure.
Apply Today with VA Loan Spot
More information concerning your VA benefits is available and our VA Home Loan Experts are eager to assist you. Whether it is determining your funding fee, figuring out your entitlement or applying for your next home loan, VA Loan Spot is committed to you. Call a specialist today at 800.537.2050. or Get a Quote Today.
Get the VA home loan you deserve.
Bobby Atkisson is a seasoned mortgage professional who provides high quality financial services to military members and veterans. With over 14 years experience in the lending and financial industry, his mission is to provide high quality mortgage programs with the most competitive interest rates. For expert advice and guidance on VA Home Loans and Refinance, contact Bobby today at 800-537-2050.