Are you a veteran or a serviceman looking for your dream house? Don’t miss the opportunity to buy a home with VA mortgage loans. Utilizing the VA home loan program can help you save something for a rainy day.
Here is the complete list of VA loan benefits you’d get with VA mortgage loans.
- VA loans allow you to buy a home with no down payment
With VA mortgage loans, you can buy a single-family house or a multi-family house with $0 down payment. Notably, you need to pay a 5% down payment with conventional loans while FHA loans require 3.5%. Generally, you can buy a home worth up to $453, 000 without making a down payment. However, please note that the maximum loan limit varies from one state to another. For instance, residential properties located in New York might be costly compared to those of Arkansas. Hence, the maximum loan limit in these areas might differ from each other.
- VA loans offer lower average interest loan rates than other loan types
The average cost of a 30-year fixed-rate FHA loan is 4.89% according to Ellie Mae. That is a bit higher compared to a conventional loan average interest of 4.86%. With VA home loans, you can enjoy an average of 4.74% nevertheless. Can you imagine how much you can save for a month with a VA-backed home loan?
- The loan benefits include no prepayment penalties
This is one of the significant VA loan benefits available to eligible borrowers. Do you have the money to pay off your loan earlier than the due date? With VA loans, early payments are no problem.
- It allows borrowers three refinance options
First, a borrower with existing VA loans can opt to lower his monthly payment with a new interest rate. This streamline refinance program is known as the Interest Rate Reduction Refinance or IRRRL. Moreover, the process only requires minimal documentation. Second, the VA offers a cash-out refinancing program for those eligible borrowers who have equity and those who have existing VA loan. Third, a veteran can apply for refinancing a non-VA home loan. This means the veteran should meet the eligibility requirements.
- It doesn’t require Private Mortgage Insurance (PMI)
You heard it right. Eligible veteran borrowers do not pay private mortgage insurance which is a mandatory requirement for most loan types. This only means you are guaranteed a home without paying anything upfront. Imagine the money you can save from not paying private mortgage insurance that only benefits the lender and not the borrower.
- VA advocates foreclosure avoidance
You will be glad to know that the VA home loan program has a team of foreclosure avoidance specialists on behalf of VA borrowers. The team encourage lenders to provide options and help the veteran borrower remain in their homes.
- Veteran homebuyers get to enjoy limitations on the closing costs
VA allows you to pay the closing costs up to 4% of the home price. But there’s one thing you need to know. You can talk to your agent to request the seller to pay some or all of the closing costs. This might be easier if you have little or no funds to pay for the closing cost.
- VA loans are assumable
In case the veteran homebuyer can no longer afford to pay off the loan, he is allowed to let someone assume his mortgage payment. Anyone can assume a VA home mortgage – as long as their income and credit qualify to take over the mortgage payment.
- Veteran borrowers are allowed second-tier entitlement
Let’s see how this works. For instance, you want to buy a home worth $200,000 with no down payment in a county where the VA loan limit is $453, 100.00. Now, the VA guaranty allows you to use 25% of your entitlement for the house. Generally, you will be left with $63,275 in remaining entitlement. The remaining entitlement can be utilized for a second loan.
- Paying for a brokerage fee is not mandatory for every veteran borrower
According to the VA Lender’s Handbook, the veteran borrower may not be charged for fees or commissions charged by real estate agents or brokers. While the VA does not in any way forbid from using their services, veteran borrowers may not be charged any fees under any circumstances.
- The loan offers lifetime benefit
Veterans and service member can utilize the loan for as long as they live. Even if the borrower has utilized all of his entitlement to buy a home, that entitlement can be fully reinstated once the loan is fully repaid.
Get all these amazing home loan benefits. Apply for a VA Loan today!