Critical VA Home Loan Benefits That Are Often Missed

Veterans home loans can be very helpful when it’s time for you or your family to go house hunting. There are so many benefits to having a VA home loan.  If you are looking for financing, you may want to review these benefits to help understand why Veterans home loans are such a good choice for so many people.

Veterans home loans can be used to buy an existing house, buy land, build a house, or make improvements to a home.  This gives you the ultimate flexibility to get the living arrangements that are right for you.  In most situations, no down payment is required, and no mortgage insurance is necessary.  Additionally, VA loans are often offered at the lowest interest rates.  This can save you a good deal of money initially, and every month.  Without mortgage insurance, you can have a lower monthly payment and get more for your budget.  No down payment and a lower rate can help you and your family get into a home easily.

One advantage of Veterans home loans that you may not be aware of prior to applying for one is that the guidelines allow for higher debt to income ratios and allow for your house payment to be a larger portion of your monthly income than is often permitted on other types of mortgages.  Of course, you still have to meet the lender’s requirements.  But those benefits can help make sure you can get the type of house you need in the neighborhood you want to live in.

Another benefit of veterans home loans many people don’t realize is that there is no pre-payment penalty.   Often mortgage lenders build in a clause that includes having to pay an additional penalty amount for paying off your loan early.  This is done so the lender can get some of the extra money they would otherwise be losing because you are no longer paying them interest. With a VA loan, if you pay your loan off early, you won’t be penalized.  You can pay off your loan or refinance whenever you want and not have to worry about owing extra.

The amounts you will have to pay in fees for your loan are also greatly reduced. Closing costs, loan origination fees and others fees have very strict limits. Unless you are a disabled veteran, you will have to pay the VA funding fee, which helps fund the program.  Even with paying that fee, you will be paying far less than fees required for most non-VA mortgages.

A very unique advantage to Veterans home loans is that the mortgage is assumable.  An assumable mortgage allows the seller to transfer the mortgage debt with its terms to the buyer.   This can make your home more attractive to buyers in a situation where interest rates are going up.

In order to get a VA loan, the property you select must appraise for at least the selling price, and pass a pest inspection.  It is also very strongly suggested that you get a complete inspection.  Although not usually required, a complete inspection, along with the required appraisal and pest inspection can offer you some peace of mind that the condition and value of the property is adequate.

When you review all your options, you are likely to find that a VA home loan is the best type of financing available for Veterans and their families.   If you have questions about the types of Veterans home loans we offer or want to begin the application process, contact us at 916-729-2000.

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