Veterans have incredible housing benefits that shouldn’t be overlooked. If you served at least 181 days in the military and had any discharge besides ‘dishonorable’ you may be eligible. If you haven’t used your VA benefits yet, consider the following 7 benefits of using VA loans.
- No down payment
The number one reason many people don’t buy a home is the lack of a down payment. VA loans don’t require a down payment – you can borrow up to 100% of the sales price if the home’s value is at least equal to the sales price. This helps veterans buy a home much sooner than if they had to save for a down payment.
- No Private Mortgage Insurance
Most people know if you put less than 20% down on a home, you pay Private Mortgage Insurance, or with FHA loans, lifelong mortgage insurance. VA loans, however, don’t charge any monthly insurance. You pay a one-time funding fee (some veterans are exempt) and that’s it.
- Vets with a Disability are Exempt from the Funding Fee
Traditionally, veterans pay a funding fee of 2.3% of the loan amount when using their benefit for the first time. However, if you have any type of disability, you may be exempt from the funding fee, making your loan closing costs even lower (VA loan closing costs are already on the low side).
- Lower Closing Costs
The VA limits the closing costs veterans can pay. In addition, the VA allows sellers to pay 100% of a veteran’s closing costs and give up to 4% of the loan amount in concessions, which are like a credit at the closing, lowering your out-of-pocket responsibility even further.
- No Prepayment Penalty
There’s no fee if you pay your loan off early. This includes making extra payments monthly, annually, or even sporadically. If you sell the house and pay the loan off in full, there’s no penalty. You aren’t required to hold VA loans for any length of time.
- Low Interest Rates
VA loans have some of the most competitive interest rates out of any loan program available today. Most veterans who compare their loan options between VA loans, FHA loans, and conventional loans always find that VA loans are the least expensive option.
- A Streamline Refinance Option
Veterans with a current VA loan can take advantage of lower interest rates or better terms with the VA Interest Rate Reduction Refinance Loan (VA IRRRL). The streamline refinance requires very little verification and doesn’t require a new appraisal or even proof of your income. If you make your mortgage payments on time, you may qualify for an even lower rate or better term than you have.
Take Advantage of VA Loans Today!
If you’re a veteran, VA loans have incredibly low rates right now, making it the perfect time to become a homeowner. With no down payment, flexible underwriting requirements, low interest rates, and competitive closing costs, it’s easy to see why you should take advantage of your VA loan benefits today.