A home purchase is among the most important purchases you can make in your life -- and if you've served in the military, you may qualify for a veteran home loan (or VA loan) that can help make the process of buying a home much easier.
The VA loan can be used for a number of purposes, including:
- Purchasing or building a new home
- Refinancing a current mortgage
- Repairing or improving your existing home, or installing home efficiency measures
How does a VA loan give you an advantage over a regular home loan? Here are some of its prime benefits:
No down payment needed: The VA guarantees purchases for qualified veterans. This enables banks and mortgage lenders to offer loans with little or no down payment. This is especially helpful if you're getting a conventional or FHA mortgage, where you're responsible for mortgage insurance unless you can put down a sizable downpayment. For example, if you put a 3.5 percent down payment on a $200,000 FHA-insured mortgage loan, you would pay $100 a month on mortgage insurance alone -- money you could save by using a VA loan.
A guaranty amount of $453,100 (or even higher): The VA loan program has a guaranty on all loans of up to $453,100, and if you happen to live in a high-cost county, the guaranty can be even higher.
Lower closing costs: The VA limits fees and costs that veterans pay at the time of closing. Homebuyers can ask sellers to pay all of their loan-related closing costs and up to 4 percent of the purchase price for things like prepaid taxes and insurance, collections and judgments.
Easier to qualify than with a conventional loan: Loans can be difficult to qualify for, especially if you've had credit issues in the past, but you can secure a VA home loan just two years removed from a foreclosure, short sale or bankruptcy.
Refinance without requalifying: With the VA Streamline Refinance loan, you can often refinance to a lower mortgage rate within the VA program without needing to re-qualify.
Cash-out refinance: You can utilize the refinance on your loan to pay off debt, make repairs to your home, remodel, or spend any way you wish.
Assistance in avoiding foreclosures: The VA offers foreclosure avoidance advocacy, with staff members who can advocate on your behalf.
No prepayment penalties: Are you capable of paying off your mortgage ahead of schedule? There's no prepayment penalties when you use the VA loan.
For more details on the va loan and how it can be a value for you, see the in-depth articles below. If you're ready to take the next step and apply for a VA loan, visit the VA Loan Eligibility section and verify that you're eligible for the loan. You can also connect with VA loan lenders directly.
How the VA Loan Can Help You:
- The Benefits of a VA Loan in Today's Market
- 6 Unbeatable Benefits of a VA Loan
- VA Loan Closing Costs: An Added Benefit
- Video: Using VA Loan Benefits to Lower Bills
- The Tax Benefits of VA Loans
- Practical Uses of VA Loans During PCS Season