A Veterans Administration Home Loan is a very useful military benefit. The VA Loan is guaranteed by the U.S. Department of Veteran Affairs and was created specifically for veterans, active duty, guards, reserve members and military spouses to become homeowners with more ease than with the conventional loan requirements. VA Loans represent the most powerful lending program on the market, but the research shows that many veterans or even current VA borrowers are not familiar with the benefits and advantages of this program. What are the benefits of a VA Home Loan? There are quite a few and we will go over them in the next few paragraphs. Key City Lending recognizes the sacrifices military members and their families make and we want to provide the benefits along with some guidelines of the VA Loans to make a possible homebuying decision easier.
Before applying for a VA Loan a possible client needs to get a Loan Certificate of Eligibility ( COE ), which is issued only by The Veterans Administration. COE is necessary in applying for a loan, but it does not guarantee the loan approval. VA Loans can be used to purchase or build a new home and even refinance a current mortgage without re-qualifying. If you read our previous blog about refinancing, you will learn that a conventional refinance loan does require a borrower re-qualify. Current borrowers can also use the VA Loan for needed home repairs, improvements or even installing home efficiency measures.
What are some of the advantages of the VA Loan?
- The greatest benefit is that eligible homebuyers are not required to have a down payment. With conventional mortgages requiring 5% and some FHA loans 3.5% down payment, having to provide 0% keeps the cash with the military members and their families. This also reduces the stress in acquiring the down payment.
- There is no monthly mortgage insurance or PMI to pay
- There are lower closing costs. This loan limits the fees and costs that veterans are required to pay. Sellers can also give up to 4% of concessions to go towards closing costs.
- Lower average interest rates than any other conventional or FHA loans.
- This loan also offers foreclosure avoidance advocacy. Staff members will find alternative options and programs to help the homeowner avoid foreclosure on their property.
The purpose of the VA Loan program is to help those who serve or served our country find affordable financing and make the dream of becoming a homeowner a reality. Call us today so we can answer any questions and to get more information about this great program. We at Key City Lending thank our veterans and their families for their service.