One of the most powerful mortgage options on the market today for veterans is VA home loans. They are also available for the active military as well as surviving spouses. There are so many great benefits that come from being able to obtain a VA loan that typically is not available in other types of mortgage loans. Many veterans have received substantial help from VA loans, and you can do the same.
$0 Down Payment
One of the biggest benefits of obtaining a VA loan is the fact that many veterans who are qualified can obtain a loan without putting down any money. This gives veterans a huge advantage on being able to buy a home without having to spend months and years saving up for a down payment.
Excellent Interest Rates
VA loan programs allow veterans to save money by taking advantage of low and competitive interest rates. Interest rates via VA loan programs are some of the lowest fixed rates available on the market. For the last six years, VA loans have had the lowest average 30-year fixed rate. VA interest rates are at least 0.5 percent lower than other mortgage interest rates. This enables veterans to keep a bit of extra cash in their wallets each month, thus making the loan less expensive.
No Strict Credit Requirements
VA loan programs are overseen by the Department of Veterans Affairs which means that there are no enforced credit score minimums that veterans have to meet. However, there are many VA lenders that use credit scores to help determine a potential borrower’s default risk. The cutoffs for credit scores can vary, but what is required is normally lower than what a borrower would need when applying for a typical mortgage with another company.
Veterans don’t have to worry about having near-perfect credit in order to obtain home financing with a good interest rate. For Veterans that have recently filed bankruptcy, or have a foreclosure on their credit, VA loans tend to also be more lenient.
No Penalties for Prepayment
Paying off a home loan prior to it maturing may result in a pre-payment penalty for various types of loans. This is due to the lender missing out on opportunities to collect interest payments. The prepayment penalty is one of the ways in which big banks get back some of that money.
However, VA loan programs allow its borrowers to pay off their loan at any time they would like without being charged any prepayment penalties. Borrowers may also have the option to refinance or purchase another home in the future without any prepayment penalties as well.
No Limits on Loans
Veterans have the ability to take out a home loan for as much as they can afford without worrying about strict limits or the need for a down payment. Previously, there have been limits at the county-level set up to help identify how much veterans could borrow. However, this is not the case any longer and veterans now have the ability to purchase above what their entitlement caps are.