People serving in the armed forces, veterans, and their families may be eligible for VA home loans. Though these loans are only guaranteed by the Veterans' Association and not provided directly by the organization, the guarantee helps people get better terms when they take out one of these home loans.
May Not Need a Down Payment
To get the best terms from a home loan, many lenders require home buyers to put down at least 20 percent of the cost of the home. Sometimes it's possible to find loans that don't require such a large down payment, but they tend to be more expensive and harder to find. A veteran home loan often doesn't require people to make a down payment, making it easier for people to afford to purchase a home.
Private Mortgage Insurance Isn't Required
Because the VA is guaranteeing the loan, you don't need to have private mortgage insurance if you can't afford to put down 20 percent of the home's cost. This can save you hundreds of dollars each month on your mortgage payments, depending on the cost of your home.
Lower Interest Rates
Working with a VA home loan specialist can help you get an interest reduction of up to 1 percent. This makes the payments and closing costs, as well as the total cost of the home by the time you finish paying off the loan, lower than it would be otherwise.
Can Prepay Loan
Sometimes people like to pay off their loan earlier if they can afford it, thus saving on interest and not having to pay the bank as much for their home. Some loans have a prepayment penalty to try to make up for some of the lost interest when this occurs, but this isn't the case with VA loans. You can pay off the remaining balance on your mortgage whenever you can afford to without worrying about incurring any penalties for doing so.
Can Count Basic Allowance for Housing as Income
Service members can also count their BAH as income and use it toward the payments for their mortgage costs each month when they get VA loans. This additional income can make it easier to get larger loans than might otherwise be possible.
Variety of Loan Types Available
VA home loans can be used to purchase a home, build a home, refinance a home, or even refinance to get cash out of the home to make home improvements, pay off debt, or pay for school.
Find a VA home loan specialist to help you realize your housing goals today.