Making the Most of Veteran’s Home Loans
Calling all military personnel and veterans – if you don’t own a home, now may be the perfect time to make the leap. There’s a lot of reasons home ownership makes sense for those with a history in the armed services, most of which are wrapped around the amazing financing options provided by the Veteran’s Administration. If you’re tired of living on-base, sick of renting and yearning for your own space, it’s time to review the benefits of VA home loans.
No Down Payment? No Problem!
Unlike ANY other form of home financing, a VA loan can be issued WITHOUT a down payment. That’s right…you don’t need to put down a penny to get a home loan through the VA. There’s no other form of financing with this particular perk, so it’s the ideal way to go if you’re eligible. In fact, 90% of VA loans are written without a down payment!
Skip the Mortgage Insurance
Most lenders require buyers who put down less than 20% of the purchase price of the home as a down payment to have mortgage insurance. Mortgage insurance protects the lender if the homeowner defaults on the loan – and it’s an added expense you don’t need to cover with a VA loan. The VA will provide mortgages without insurance, saving you thousands of dollars.
VA Mortgage Rates Tend to Be Lower
On average, a VA loan is 0.25% less than a conventional mortgage, nationwide. No matter what area you’re shopping in, you’ll be getting the best available rate when you go with a VA loan. And…bonus…VA loans are available to eligible persons with lower credit scores than most other lenders. If your credit history is a little shaky and you can obtain a VA loan, you’ll certainly pay less than you would with any other type of financing.
The Government Has Your Back
All VA housing loans are guaranteed by the federal government. If something were to go terribly wrong at some point, and you cannot make your mortgage payments, a portion of the loan amount will be paid to the lender by the government. This “security blanket” makes VA loans very attractive to private lenders.
You Can Still Shop Around for a Mortgage
Because the federal government does not fund or issue these loans itself, you can hunt for the best rate on your VA loan just like any other home loan. The federal government doesn't set the rates for VA loans. U.S. banks, savings and loans, credit unions, and mortgage lenders each set their own VA loan rates and fees. This gives you the flexibility to compare offers and choose the one that works best for you.
VA Loans Meet Your Requirements for Flexibility
As we all know, your life in the military can turn on a dime. If you need to move, a VA mortgage has no pre-payment penalties or exit fees if you need to sell your home at any time. VA loans also cover almost any type of housing, including new construction. You can get a fixed or adjustable rate loan, depending on which type meets your needs best.
Refinance at Any Time
There are also no limits on how many times you can refinance your VA loan, or when you can refinance. You can also switch over to a non-VA loan at any time, if the situation requires it.
It’s Easier to Qualify for a VA Loan
72% of applicants for VA loans are approved, while only 68% of conventional loans and 60% of FHA loans receive approval. With the government backing provided by the VA, most lenders are more relaxed when it comes to issuing loans to veterans or those in the military.
The VA Limits Your Closing Costs
There’s a lower ceiling for closing costs when loans are backed by the VA. These lower limits mean savings for you at a time when cash is at a premium. You can use the savings to purchase furniture, cover moving expenses or treat your family to something special.
You Can Pass Your Loan on to the Next Buyer
If you’re buying a home from or selling your home to a buyer who is also qualified for a VA loan, there’s even less headache and stress for both parties. VA loans are “assumable” loans, which means you can simply transfer the existing loan, at the same rate, with the same parameters, to another person. This is especially valuable if market values are rising and writing a new loan will increase the monthly mortgage payment.
Who Qualifies for a VA Loan?
Not only veterans qualify for VA loans. If you’re affiliated with any of the following, you can apply for a VA loan as well:
- Active-duty service members
- Members of the National Guard
- Reservists
- Surviving spouses of veterans
- Cadets at the U.S. Military, Air Force or Coast Guard Academy
- Midshipmen at the U.S. Naval Academy
- Officers at the National Oceanic & Atmospheric Administration.
You do need to meet minimum service guidelines to apply.
- You’ve served 181 days of active duty during peacetime
- You’ve served 90 days of active duty during wartime
- You’ve served six years in the Reserves or National Guard
- Your spouse was killed in the line of duty and you have not remarried
At Ernest Homes, we fully support our military family members, and offer special incentives for buyers with connections to the armed services. Call our Sales Team today at 912-660-9673 for more information!
