Are you thinking of applying for a VA home loan?
If yes, there's no doubt you've gone through the eligibility requirements and established that you indeed qualify. VA home loans, which are provided by private lenders, but backed by the Department of Veteran Affairs, are only available to a select group of people.
But why should you go for a VA loan when there are other types of mortgages in the market? Well, here's the thing. As long as you qualify for a VA loan, you should absolutely go for it. Check out these unbeatable advantages of a VA loan.
Nothing Beats a Government Guarantee
When you take out a conventional mortgage, it's your sole responsibility to repay it fully. If you default on it, the lender will initiate the foreclosure process.
However, when it comes to a VA loan, the government will guarantee a portion of your loan. In the event that you're unable to repay, the Department of Veteran Affairs will provide supplemental servicing, reducing the chances of your home going into foreclosure.
Also, the fact that a VA home loan is guaranteed by the government means lenders can afford to offer more favorable terms than you'd find on a conventional loan. We're talking about lower interest rates!
No Down Payment Required
When you take out a conventional loan, most lenders will ask you to pay anywhere from 3 to 20 percent of the price of the home you want to buy as a down payment. This can make it harder for you to purchase the home you want.
With VA home loans, though, a down payment isn't required. That's right. If you want to buy a $300K home, you won't have to worry about paying down any amount of money.
If you're unable to raise a 20 percent down payment but still want to push on for conventional mortgage, you can still get it, but you'll have to purchase mortgage insurance. This brings us to the next benefit of VA home loans.
No Mortgage Insurance Requirement
Mortgage insurance is designed to protect the lender in case you default on your mortgage or you pass on before paying it off. These insurance premiums only add to your mortgage costs.
With a VA home loan, there's no such requirement.
Lower Closing Costs
Clearly, it's much easier and cheaper to buy a home with a VA mortgage. Most of the expenses that would normally increase the closing costs of a mortgage don't come into play when you're getting a VA loan.
Without these costs, you can now even afford to hire high-rated real estate agents to help you find an ideal property.
Enjoy the Advantages of a VA Loan
The advantages of a VA loan are unbeatable, do doubt. No down payment. No mortgage insurance. And the sweetest bit? It's backed by the government.
If you're eligible for a VA loan, don't look elsewhere.
Keep reading our blog for more mortgage tips and insights.
