The VA Loan is a mortgage loan issued by approved lenders and guaranteed by the U.S. Department of Veterans Affairs (VA). The program was created in 1944 by the United States government to help returning service members purchase homes without needing a down payment or excellent credit. This historic benefit program has guaranteed more than 22 million VA loans to help veterans, active duty military members and their families purchase homes or refinance their mortgages.
Today, the VA Home Loan program is more important than ever to service members. In recent years, lenders nationwide have tightened their lending requirements in the wake of the housing market collapse, making the VA Loan a lifeline for military homebuyers, many of whom find difficulty when faced with tough credit standards and down payment requirements.
Like all home loans, VA Mortgages have considerable details and information to review. We at Veterans Of America Mortgage encourage you to use our website’s resources to learn about the specifics of this exclusive home loan benefit.
Here are main advantages
- No Down Payment Necessary. – Homebuyers will usually need at least a 5 percent down payment for conventional loans or a 3.5 percent down payment for FHA financing. On a $200,000 loan, that’s $10,000 for conventional borrowers and $7,000 for FHA. For many first-time homebuyers, coming up with that kind of cash up can be challenging. Being able to purchase with $0 down means VA borrowers don’t have to spend years saving to scrape together a big down payment.
- Less Stringent Qualifications. – Many first-time homebuyers might not yet have a strong credit history, which can make it more difficult to get approval for a mortgage or qualify for an affordable interest rate. Since the VA Loan is government-backed, VA Loans are easier to qualify for at competitive rates.
- Lower Monthly Payments. – Since VA Loans don’t require the added monthly expense of private mortgage insurance (PMI), they tend to leave more money in your pocket each month. In addition, the competitive VA Loan rates can save a typical buyer thousands over the lifespan of the loan.