The Benefits of a VA Loan
A VA Loan is backed by the U.S. Department of Veterans Affairs (VA), meaning the VA guarantees the loan if you are unable to pay it off, which reduces the risk to the lender. While these loans
have many benefits, there are several features that set them apart from other loan programs.
No Down Payment.
VA loans can be100% financed, meaning you don’t have to save up for a down payment. Keep in mind, paying a small amount for a down payment will save you money in the long run.
Affordable Closing Costs.
With traditional loan programs, you could pay anywhere from 2% to 5% of the home’s purchase price on closing costs. With a VA loan, there is a limit on the amount you can be charged for closing costs, which provides an added moneysaving benefit to the borrower.
No Mortgage Insurance
If you put less than 20% down on a traditional mortgage, you’ll typically be required to pay mortgage insurance, which gets added to your monthly mortgage payment. VA loans save you money by not requiring mortgage insurance.
VA loans are backed by the government, which provides a guarantee to the lender in case you default on your loan. Because of this guarantee, lenders are able to offer better loan terms and interest rates, helping you to save money.
Already took out a VA home loan? Your VA benefits are reusable, so you can use your benefit, again and again, making affordable homeownership attainable over the course of your life.
No Prepayment Penalty
Many loan programs charge the borrower a penalty for paying off their loan early. This may happen if the homeowner decides to sell or refinances their existing property. Fortunately, VA loans don’t charge this type of fee, which gives you more freedom and flexibility.
Make the Most of Your Benefits Today
While VA loans offer flexibility and affordability, it’s important to be aware of the housing market around you. With current home prices and interest rates on the rise, the longer you
wait to buy a home, the more money it may cost you — even with a VA loan. That’s why it’s important not to wait. If you’re wanting to purchase a home this year, get the most out of your
VA benefits by buying now. Visit benefits.va.gov to check your eligibility.
Tony Byrne is not acting on behalf of or at the direction of the United States Department of Veterans Affairs or
any government entity or program.
Information provided via Mortgage Returns by Ellie Mae.