Purchasing a home can be a confusing and frustrating experience, particularly for the first-time homebuyer. In spite of the efforts of the United States Department of Veterans Affairs to provide as much information as possible to veterans and active duty personnel about its loan program, confusion about VA interest rates continues to perplex buyers.

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VA loan eligibility guidelines reflect the efforts of the Department of Veterans Affairs to make housing affordable and accessible to veterans and active duty personnel. Through flexible and lenient underwriting standards, VA loan eligibility is available to more current and former members of the armed forces.

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Buying a home can be a challenge unless you have 20 percent of the purchase price to put down. Fortunately, VA loan benefits offer an option for veterans, active duty personnel, who dream of owning their own home, but do not have the cash on hand to put down. Other advantages also make VA loan benefits an attractive financing option.

No Down Payment

Buyers who make use of their VA loan benefits can borrow 100 percent of the appraised value of the home they are buying, as long as it does not exceed the purchase price.

Lower Closing Costs

VA loan benefits keep closing costs low by placing limits on the types and amounts of fees VA approved lenders may charge borrowers. Additional assistance for borrowers who do not have money for closing costs is available in the form of a seller’s concession. VA loan benefits allow a seller to pay the buyer’s closing costs up to 4 percent of the loan amount.

No Private Mortgage Insurance

Borrowing 80 percent or more of the value of a home using a conventional mortgage loan would require that the buyer pay for private mortgage insurance to protect the lender. The federal government backs VA loans, so the borrower avoids the additional monthly expense of private mortgage insurance.

The VA charges a one-time funding fee instead of private mortgage insurance to defray the costs of the program. The funding fee can be financed in addition to the 100 percent borrowed to finance the purchase. Veterans receiving monthly payments for a service-connected disability can apply to have the VA funding fee waived.

Other Advantages of a VA Loan

Lenders are prohibited from imposing a fee or penalty for paying off all or part of the loan before it is due, and VA loan benefits also allow a veteran to sell a home and have the new buyer assume the existing VA loan without limiting the veteran’s ability to use the VA loan benefit again.

VA loan benefits are helping many veterans and active duty personnel realize the dream of home ownership.

For many veterans, getting a VA loan instead of a conventional loan is a no-brainer. The benefits and streamline processing make a VA loan very attractive to current service members and veterans. Here are some of the top reasons vets are getting VA loans.

1. Get into your first home with style! First-time home buyers are always looking for ways to save money to get more comfortably into their new home. With a VA loan, there is no down payment required so you can use the funds you would normally use for a down payment to get a comfy couch or new appliances. Not having to worry about a down payment can help you finance a home that you may not have been able get otherwise. This is the most popular reason veterans go with a VA loan when purchasing a new home.
2. Eliminate monthly private mortgage insurance. If you’re looking to refinance, you’re looking to save money. With a VA loan, you can usually lower interest rates and get rid of the monthly mortgage insurance. The VA has a funding fee instead of private mortgage insurance payments. This fee is rolled into the base loan amount and paid over the life of the loan. However, some service members don’t even pay it because the funding fee can be waived for veterans with a disability rating of at least ten percent.
3. Consolidate unwanted debt. Many Americans struggle with credit card debt so it’s no surprise that many use a cash-out refinance VA loan to pay off debt. Whether it’s high interest credit debt, college loans or you just wanting to pay off a car loan, VA loans are a great way to manage those debts.
4. Lower monthly mortgage payments. When it comes time to refinance, nobody likes a lot of paperwork. One reason many like VA loans is the refinance option called Interest Rate Reduction Refinancing Loan (IRRRL). This program allows you to refinance your current VA loan without an appraisal and can save you hundreds of dollars a month on your monthly mortgage payments.

To see more reasons why many American veterans are taking advantage of a VA home loan, call us today at 1-877-867-0905.