The VA home loan program is one of the benefits offered by the Veteran’s Administration to eligible servicemembers and veterans. The VA does not lend money, however, it will reimburse VA lenders in the event of a default. This VA guaranty reduces the lender’s risk which makes them desirable by lenders and, at the same time, makes VA mortgage rates very competitive. If you are eligible, here are 7 reasons why you should choose a VA loan:
1. Eligible borrowers can use a VA loan for 100% financing. Because of this, there is no need for a down payment and no need for monthly mortgage insurance. VA borrowers can become homeowners without spending years trying to save for a minimum down payment for a home purchase. If the money is available for a down payment, these funds can be used for other necessities or investments.
2. An existing VA loan can be refinanced through the IRRRL (Interest Rate Reduction Refinance Loan) program. With this program, there is no need for an appraisal or other lengthy documentation requirements.
3. A VA loan can be used to make energy efficient improvementssuch as solar heating or cooling systems. It can also be used to make home improvements and repairs. This should be discussed with your lender at the time of application.
4. A VA loan is assumable. This means that a home buyer can purchase a home that has a VA loan attached and assume the mortgage. This becomes significant when mortgage rates are on the rise and the existing VA loan rate is low. When this happens, it is a benefit to the seller whose property becomes more attractive and the buyer who will be assuming a low rate VA loan. There are guidelines that must be followed in order to obtain an assumed VA mortgage. All VA loans that closed March 1, 1988 must be approved for assumption.
5. VA loans allow for seller concessions, which are different that seller paid closing costs. Seller concessions are also paid by the seller and can be used for such things as paying off a home buyer’s existing debt.
6. A VA borrower can receive 100% financing with no out of pocket costs. In order to do so, you will need to work closely with a reputable VA lender who has the experience and knowledge to do this.
7. VA loans can be used with state and local housing bond programs which further reduces the cost of a VA home purchase.
Conclusion: A VA loan is one of the best benefits offered by the Veteran’s Administration for those who have served our country. It is also one of the best mortgages available today which can be used for a home purchase or refinance in any location. When compared to other types of mortgages, it is ultimately cheaper because it offers low VA mortgage rates and does not require any type of mortgage insurance. For those who are eligible, a VA home purchase loan is always the better choice to make which will continue to offer you benefits as time goes on.
Need assistance filling out a VA loan application? Feel free at any time to contact me for more information about a VA loan and how you can achieve a 100% VA home purchase or VA refinance.
My loan process was very easy and quick. Not to mention a great loan rate. I couldn't be happier!
Capt Sam T. - US Army
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