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While there are many different types of mortgages available, nothing can beat the multiple benefits that borrowers can enjoy with VA loans. VA loans are truly designed to help military borrowers attain homeownership for the long term. When researching different loan types, borrowers will find that these are the 12 best reasons for choosing a VA loan.

 1. Credit scores – there are no big pricing hits to VA mortgage rates when credit scores are low. Scores of 620 and even sometimes lower, can be approved for VA loans. VA mortgage rates are also much better than those offered for conventional loans.

 2. The debt to income ratios (DTI) for VA loans can be much higher – as high as 50 to 55% in some cases. For conventional and FHA mortgages, the DTI will soon be lowered to 43%.

 3. VA loans offer true 100% financing. Even with 100% financing, there is no private mortgage insurance necessary with VA loans. This is a huge savings for borrowers on a monthly basis which is not available with any other types of mortgages.

 4. VA loans limit the amount of closing costs that a lender can charge which is ultimately a protection for the borrower. Further, the seller is permitted to pay the VA closing costs, such as fees for title, recording, appraisal, etc. This is in addition to seller concessions which may be up to 4% of the purchase price.

 5. Jumbo VA loans are much easier to qualify for than other jumbo loan programs.

 6. VA loans give borrowers the opportunity to finance the one-time funding fee. Also, a borrower who has a service related disability may often qualify for the funding fee to be waived.

 7. Borrowers can refinance a VA loan to a lower mortgage rate through the VA streamline refinance program (IRRRL) without the need to re-qualify. The IRRRL is probably the easiest refinance program available today.

 8. When refinancing a VA loan, cash-out of 90 – 100% of the loan amount is possible, depending on the lender. Conventional loans limit the amount of cash-out to 80 – 85%.

 9. There are no prepayment penalties with a VA loan. This gives the borrower the freedom to sell their home or refinance at any time.

10. VA loans are assumable which is a benefit for both the seller and the buyer. The seller has the advantage of offering a home with an assumable mortgage and the buyer has the advantage of taking on an existing loan with no change in loan terms.

11. VA loans require a VA appraisal that is performed by a VA approved appraiser. By doing so, the VA protects borrowers from purchasing a home that may be in need of repairs. Borrowers are also informed of the properties reasonable value through the VA appraisal.

12. In order to continue helping those homeowners who have VA loans, VA assistance is available to those who are in default due to temporary financial difficulty.

Even though the benefits of a VA loan far outweigh any other type of mortgage, many borrowers are often swayed towards conventional loans by some lenders. For this reason, it is important for eligible VA borrowers to seek the assistance of a knowledgeable VA lender who is more than happy to offer VA loans to consumers.

Rosemary Rugnetta

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