The veterans home loan, also referred to as the VA mortgage, has been around for a number of years and is still a great way to purchase a home. The VA stats show that these mortgages have the lowest occurrence of foreclosure among all types of home loans. While we could list several reasons to choose this mortgage, we are going to focus on the top 4 benefits of a VA home loan.
No Down Payment
The guidelines from the Veteran’s Administration for the VA home loan does not require a down payment for qualified buyers. This means a borrower can get a loan equal to 100% of the home’s purchase price. This one aspect of the loan can save a borrower thousands of dollars of out of pocket expenses at the time of purchase.
Flexible Credit Rules Make It Easier to Qualify
A conventional mortgage often requires borrowers to have a rather high credit score and a strong history of repaying debt in order to qualify for their best rates. This is not the case with a VA mortgage.
The credit requirements for a VA mortgage are more relaxed. This means that people will less than perfect credit history can often get approved for a VA home loan, opening the opportunity to qualify to many more people.
Mortgage Insurance NOT Required
Conventional loans as well as the FHA loan will charge borrowers private mortgage insurance if the borrower pays less than 20% down at the time of purchase. This mortgage insurance protects the lender, not the borrower, in the event that the borrower is no longer able to make the payments and the home is foreclosed. The mortgage insurance is calculated as a percentage of the outstanding loan balance and can get quite costly depending on the borrower’s credit score and the loan amount.
The VA home loan has no private mortgage insurance requirement. This saves the borrower money each month compared to other types of mortgage loans.
Limit on Closing Costs
The VA guidelines state that there is a limit on the maximum amount of closing costs that can be charged to a borrower. This provides an immediate saving when the home is purchased that is unique to this type of home loan.
Who is Eligible?
In order to be eligible for a VA mortgage loan, veterans and surviving spouses must meet requirements based on available entitlement and years of service. To learn more about our VA mortgage loans, contact your local Inlanta loan officer today.
To all of those who proudly serve or have served in our US military, we thank you for your service!