If you are a veteran, service member, or eligible surviving spouse, you may be able to get a VA loan to buy, build, improve, or refinance a home. VA loans are mortgages backed by the Department of Veterans Affairs (VA), which means the VA guarantees a portion of the loan amount in case you default. This reduces the risk for lenders and allows them to offer you more favorable terms than conventional loans. Here are some of the top reasons why you should consider applying for a VA loan.

No down payment required

One of the biggest hurdles for many homebuyers is saving enough money for a down payment. With a VA loan, you can buy a home with zero down payment, as long as the loan amount does not exceed the appraised value of the property. This can save you thousands of dollars upfront and make homeownership more accessible.

Lower interest rates

VA loans typically have lower interest rates than conventional loans, which means you can save money on your monthly payments and pay less interest over the life of the loan. The VA sets a limit on how much lenders can charge in interest and fees, and also negotiates lower rates with participating lenders.

No mortgage insurance

Unlike conventional loans, which require you to pay for private mortgage insurance (PMI) if you put less than 20% down, VA loans do not require any mortgage insurance. PMI is an extra cost that protects the lender in case you default but does not benefit you as the borrower. By avoiding PMI, you can lower your monthly payments and save money over time.

Easier credit requirements

VA loans are more flexible and forgiving regarding your credit history and score. You do not need to have a perfect credit score or a long credit history to qualify for a VA loan. The VA does not set a minimum credit score requirement but instead looks at your overall financial situation and ability to repay the loan. Lenders may have their own credit standards, but they are usually more lenient with VA borrowers than with conventional borrowers.

Extra advantages for disabled veterans

If you are a disabled veteran who receives disability compensation from the VA, you may be eligible for additional benefits when applying for a VA loan. For example, you may be exempt from paying the VA funding fee, which is a one-time fee that helps cover the cost of the VA loan program. You may also qualify for grants to help you adapt or improve your home to suit your disability needs.

These are just some of the many benefits of getting a VA loan as a veteran. To learn more please give us a call or ask a question here.