Millions of veterans have been struggling to buy a home. While buying a home is one of the most crucial decisions that veterans can make, the sad truth is that not all of them can afford to purchase their dream home.
The Veterans Administration (VA) Loan program is designed to provide mortgage financing to veterans and service personnel. Launched in 1944, the VA loan program offers long-term home financing to veterans and their surviving spouses. This also includes spouses of veterans who died during active duty.
The VA program enables veterans purchase primary residential properties home in specific areas where private or conventional loan financing is not available. This may include small towns and cities, rural areas, and such.
Before seeking a VA loan, it’s important to consider some of its advantages:
Down payment
Unlike conventional mortgage loans, you are not required to make a down payment for a VA loan. Conventional loans generally require a 5 percent down payment.
On the other hand, borrowers can secure full VA loan without any down payment.
Monthly mortgage insurance
The Department of Veterans Affairs guarantees VA loans in case of default. Therefore, there is no need to make mortgage insurance payments every month.
Although VA loans are made through private lenders, the Department of Veterans Affairs sets the rules and regulations and mortgage terms associated with the loan.
On the contrary, conventional loans require borrowers to pay monthly mortgage insurance unless they are making a substantial down payment.
Average interest rates
The average interest rates on VA loans are lower than conventional loan types. In fact, VA loans are so popular among borrowers due to their affordable interest rates.
Prepayment penalties
VA loan program allows borrowers to pay off the loan early, without any penalties.
Credit score
Loan applicants don’t need to worry about having a high credit score to apply for VA loans. In many cases, borrowers can qualify for the loan, regardless of their credit score.
However, keep in mind, different lenders may have their own credit score requirements. Borrowers are generally required to have a credit score of 620 or higher.
Buyer’s closing costs
Sellers are allowed to pay all of the buyer’s loan-related closing costs. In addition, they receive up to 4 percent in concessions.
With so many benefits, VA loan is a great option for military members. If you’re interested in applying for a VA loan, we can help.
Our mortgage experts help veterans in California, Colorado, Washington, Iowa, Illinois and Michigan secure VA loan in no time. Click here to receive a free quote on a Colorado va loans
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