VA home loans offer many advantages over other types of loans. Here are the top five advantages of this home loan.
A VA home loan is one of the best mortgages available for military veterans and their families. Here are the top five advantages of this type of mortgage:
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1. No down payment required
A VA home loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The loan may be issued by qualified lenders. The VA home loan was created in 1944 by the United States government to help returning service members purchase homes without needing a down payment or excellent credit. This historic advantage continues today. Service members who are eligible for a VA home loan have access to one of the most powerful mortgage options on the market. Not only do VA loans have competitive rates and generous credit standards, but they also don’t require borrowers to make a down payment. For many homebuyers, this advantage can mean the difference between owning their dream home and being forced to rent. If you’re a veteran or active duty service member, learn more about how you can take advantage of this powerful mortgage option.
2. Low-interest rates
One advantage of a VA home loan is that the interest rate is often lower than the interest rate on a conventional mortgage. This can save the borrower money over the life of the loan, and it can make it easier to qualify for a loan in the first place. The lower interest rate is made possible by the fact that the VA guarantees a portion of the loan, which protects the lender from losses if the borrower defaults. In addition, the VA imposes certain standards on lenders participating in its programs, which helps to ensure that borrowers are treated fairly. As a result, VA home loans offer a number of advantages to borrowers, including low-interest rates.
3. Flexible terms
Veterans who are looking to purchase a home may be eligible for a VA home loan. One of the advantages of a VA home loan is that it offers flexible terms. For example, veterans can choose between a fixed-rate and an adjustable-rate mortgage. In addition, veterans can choose to have a term of 30 years or 15 years. Veterans can also choose to make a down payment or not. As a result, veterans have a lot of options when it comes to choosing a home loan that best meets their needs. Another advantage of a VA home loan is that it does not require private mortgage insurance (PMI). This can save veterans hundreds of dollars each year. In addition, VA home loans are available with no down payment. This can help veterans who may not have the cash available for a traditional down payment. As a result, the VA home loan program offers veterans a lot of flexibility and options when it comes to purchasing a home.
4. Limited closing costs
One advantage of a VA home loan is that it often comes with limited closing costs. This can be a significant advantage for borrowers, as closing costs can add up quickly. By having limited closing costs, borrowers can save money on their loans and use that money for other purposes. Additionally, limited closing costs can help make a VA home loan more affordable. This can be especially helpful for borrowers who are on a tight budget. For these reasons, the limited closing costs associated with a VA home loan can be a major advantage.
5. Funding fee can be financed into the loan amount
The advantage of the VA home loan is that the entire funding fee can be financed into the loan amount. This means that the veteran does not have to come up with any cash out of pocket to pay for this fee. There are other benefits to this as well. The veteran does not have to pay private mortgage insurance (PMI) because the VA guarantees a portion of the loan, which protects the lender in case of default. Also, there are no prepayment penalties if the veteran decides to sell or refinance the home before the full loan term has been completed. All of these factors make the VA home loan an attractive option for qualified veterans.
Many veterans and active military members are eligible for a VA home loan, which can be a great way to finance the purchase of a new home. To get a VA loan, you’ll need to work with a mortgage lender who offers them. In Tempe, mortgage lenders offer a variety of VA loan products, and our team of mortgage professionals can help you choose the right one for your needs. We’re here to answer your questions and guide you through the process, from start to finish. Give us a call today to learn more about how we can help you take advantage of the benefits of a VA home loan.