Finding and securing an affordable home loan can be overwhelming, but the government has streamlined the process for the brave individuals who serve or have served the country. More than 20 million military families have benefited from the Department of Veteran Affairs (VA) mortgage assistance program. As a thank you to veterans for their valued service, the VA mortgage assistance program is designed so that affordable funding is within reach and is easy to apply for; this program is also open to active duty personnel and surviving spouses. Your may use a VA loan to purchase a home or refinance your existing property. You can even borrow in order to make modifications to your home if you are disabled. We’re excited to help you learn more about this program—keep reading to learn more about VA loans.
Flexible and Easy to Apply For
There are fewer qualifications for obtaining a VA mortgage loan than for conventional funding, these include:
- A certificate of eligibility
- Proof of sufficient income
- A reasonable credit score
- Certification that you will live in the home
- Other applicable documents
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No Down Payments or Private Mortgage Insurance
Most conventional home loans require a down payment as high as 20%. One of the greatest perks for veterans is the 0% down option; in most cases, no down payment is required. Civilian buyers financing more than 80% of their home must purchase private mortgage insurance (PMI). Since the government backs VA loans, this requirement is waived! See if Your Eligible
Lower Interest Rates
The government-backed guarantee gives lenders more flexibility with interest rates, which is why lenders can offer you the most favorable terms for your financial circumstances and unique needs. Several factors will affect your interest rate, such as: current market conditions, your credit score, debt-to-income ratio, and loan duration (i.e. 30-year loans have higher interest rates than 15-year loans). Typically, VA loans cost approximately 0.25% less than standard home loans. Here’s how the rates compare:
- VA 30-year fixed mortgage: 3.25%
- Conventional 30-year fixed mortgage: 3.5%
Additionally, if you make higher monthly payments than expected, you’ll save even more money in the long run!
Added Savings and Protection
VA mortgages usually come with additional savings. For example, if you have a service-related injury, you may qualify for lower closing costs; the right to prepay without penalty is another benefit. With adjustable-rate mortgages, borrowers are typically exposed to greater risk, and interest rates could rise at any time. On the other hand, government-backed adjustable-rate mortgages provide veterans with an extra layer of protection. VA loans help to minimize your risk without limiting your options.