As a veteran, you have more home loan options than non-veterans, of which the most exclusive is the VA Home Loan. Generally, the benefits of a VA Home Loan greatly outweigh the benefits of any other loan you can get as a veteran, enabling you to save money now and in the future with its many benefits.
You do not Need a Down Payment
Perhaps the largest benefit of this program is the fact that you do not need a down payment. You are able to secure 100 percent financing of the purchase price of the home, which for veterans just getting out of the service or those that are constantly required to move is a great advantage since it can be hard to save enough money for a large down payment.
Your Payments will be Lower
Chances are that your payments on a VA home loan with no down payment will be even lower than a conventional loan with a down payment, unless you are able to put down 20 percent. This is because you do not have to pay Private Mortgage Insurance, which could mean a savings of hundreds of dollars per month. The VA assumes the risk of your loan, which is what the PMI would offer a lender; if you were to default on the loan, the VA would pay the lender back and take possession of the home.
A Low Credit Score is Okay
One of the great benefits of a VA Home Loan is the fact that you are able to secure financing even with a low score. This is because the VA does not put a lot of emphasis on the credit score; instead, they look at the credit history for the last 12 months. As long as you do not have more than one 30-day late payment in that time, you are typically able to secure VA financing. The only exception to that rule is if you were to have a bankruptcy, foreclosure, or judgment reporting during that time, as the lender would have to dig deeper into your credit history to find out what happened.
Refinancing is Easy
Even though one of the primary benefits of the VA Home Loan is to have low interest rates, we all know that interest rates fluctuate daily. If you find a year or two down the road that interest rates are much lower than when you secured VA financing, you can typically refinance with very little verification required. The streamlined process enables you to refinance based on the fact that you will be saving money every month and will not require you to verify your income, employment, credit, and even the value of the house again.
The VA Cares about your Disposable Income
You will likely find that one of the main factors the VA cares about is the amount of disposable income you have on hand every month. Every area of your state has a certain amount of extra money they must have left over after the mortgage and necessary monthly payments are made. This is in an effort to ensure that you are not getting in over your head, making your housing payments a struggle for you.
As you can see, there are many primary benefits of a VA Home Loan making it a viable source of financing for veterans that served or are serving our country. It is well worth the effort to shop around with different lenders in your area to determine if you qualify for VA financing as well as what options are available to you as each lender offers a variety of different benefits, including different rates and charges.