We truly appreciate our military. So after Memorial Day, we thought we’d do a post to help our military friends by covering VA loans. A VA loan is a mortgage loan guaranteed by the U.S. Department of Veterans Affairs (VA). And it may be exactly what you or a military family you love needs.
Benefits of a VA Loan:
- No down payment. The need for a down payment is eliminated, while most loans require at least 5% down, and 20% or more down to avoid loan insurance.
- No mortgage insurance. The VA’s guarantee eliminates the need to pay for mortgage insurance, which will lower your monthly costs.
- No prepayment penalty. Some loans have fees you incur if you try to pay a loan off early – not so with the VA loan. You can save a lot on interest simply by paying a little bit extra toward your mortgage each month, with no penalty.
- Limited closing costs. Sellers sometimes cover all of a buyers loan-related closing costs.
- Competitive interest rate. VA loans have steadily had the lowest average interest rate of all types of home loans.
A VA loan is meant to be used for a primary residence only, so purchasing another kind of property most likely won’t qualify for a VA loan. However, there are a lot of options, like:
- Buying or building a new home
- Repairing or improving your existing home
- Refinance your existing loan.
Refinancing can open up options like reducing your interest rate or even getting a cash-out refinance. You can refinance up to 100% of your primary home’s value. We’d be happy to help you figure out what is best for you and your family!
There are a variety of factors that affect eligibility, like suitable credit and sufficient income – you can see more here. But most members of the military are eligible to apply for a VA loan, generally after 6 months of service. And for those who know the true meaning of Memorial Day… The spouses of military members who gave their lives in active duty are also eligible to apply.
Feel free to pass on this quick guide to a military family you love – or call us! We’d be honored to help you apply for a VA loan and find your family’s dream home.
All our best,
United Faith Mortgage Team Leader