As a veteran, you worked hard and made unimaginable sacrifices to protect our country and our freedom. It's only fair that you receive some benefits in return! One big benefit of your service is the opportunity to use a Veterans Affairs (VA) home loan to purchase or refinance a home. Here are five great reasons to use a VA loan:
1. Qualified buyers using a VA loan may purchase a home with no down payment (up to the Federal Housing Agency limit for the property's county).
Because the federal government insures a portion of each VA loan, lenders know their interests are protected. Therefore, lenders offer veterans VA home loans without requiring a down payment. Obviously, the ability to buy a home without saving for years to accumulate a down payment is a huge advantage to you.
2. VA loan rates are typically lower than conventional loans.
Since VA loan investors know the loans are guaranteed by the federal government, the veteran could receive a better interest rate than many conventional loans would offer.
3. VA loans do not require or include any monthly mortgage insurance premium payments.
Typically, home buyers who do not put 20% down will pay private mortgage insurance (PMI) on a conventional loan or PMI plus monthly mortgage insurance premiums (MIP) on a Federal Housing Administration (FHA) loan. However, VA loans never charge any monthly insurance fee, so you save money every month! Even if your insurance would have been a reasonable $100 per month, that's $1,200 per year you'd save with a VA loan.
4. Buyers' closing costs on VA loans are limited.
While closing costs usually run 2-5% of the home loan amount for most buyers, as a veteran taking out a VA loan, your closing costs are limited. Again, that means you save money! The Department of Veterans Affairs dictates exactly what you will and will not pay and the associated amounts. VA loans require a one-time funding fee, which is waived for veterans who have a service-connected disability rating through the VA.
5. Veteran or non-veteran buyers may assume your VA loan when you sell, possibly making your home more attractive to buyers.
If you have a VA loan, when you sell your home, you may allow your buyer—whether a veteran or not—to assume your VA loan. Since non-veterans are not usually eligible for a VA loan and its associated benefits, the ability to assume your loan may make your home an attractive buy. All buyers must qualify for the loan, and veterans who allow non-veterans to assume their loan may lose their entitlement.
If you're a veteran and you're considering purchasing or refinancing a home, make sure you check out a VA loan. Don't miss out on all the perks you deserve for your military service!