5 Benefits Of Using A VA Mortgage Loan To Finance A Home Purchase
Homeownership is a dream that most families have, but purchasing a home can be difficult. Few people have enough liquid assets to purchase a home with cash, and with the prices of homes going up, many people find it challenging to save up enough money for a down payment for a conventional mortgage loan. Luckily, active duty military and veterans have loan options that make it easier to obtain a mortgage loan in order to fulfill the dream of owning a home. VA mortgage loans are backed by the United States government and differ from conventional mortgage loans in several ways. Some of the top benefits of using a VA loan to finance the purchase of a home include:
Down Payment Not Required
Most conventional mortgage loans require a borrower to have tens of thousands of dollars available to use as a down payment, and many families, especially first time home buyers, just don't have that type of cash in savings. A huge advantage of VA loans is the fact that there is no down payment required. Without the stipulation of a large down payment, homeownership is much more obtainable for active-duty military and veterans.
Flexible Qualification Requirements
Obtaining a conventional mortgage can be quite a hassle that involves a huge amount of paperwork and stringent credit requirements. Many people worry that they may not have a high enough credit score or enough financial documentation to get approved for a loan. Since VA mortgage loans are backed by the U.S. government, the requirements to get approved for a mortgage are much more flexible.
Competitive Interest Rates
VA loans are guaranteed by the U.S. government, but the Department of Veterans Affairs does not originate or fund the loans. Instead, a variety of lenders offer VA loans, which means that you will have the ability to shop around to see which lender offers the best interest rates and terms. Having the ability to shop for a mortgage makes it easier to lower your monthly mortgage payment.
Affordable Closing Costs
Closing costs are expenses associated with all of the paperwork involved when buying a home, closing escrow, and transferring the title. Depending on the price of the home being bought, closing costs can be thousands of dollars. A big perk of having a VA loan is the fact that there are strict limits applied to how much a lender can charge in closing costs. This means that you will have more money in your pocket when you get the keys to your new house.
Contact a local mortgage lender to learn more about VA loan financing.