The VA Home Loan program has many benefits vs. conventional loan financing. Eligible Veterans who are purchasing a home, can and should take advantage of the benefits they have earned from their time in the Military service. The benefits of a VA Home Loan vs. a conventional loan include:
100% financing: no down payment or monthly mortgage insurance payments.
Competitive interest rates comparable to conventional loans with 20% down payment requirements.
The home buyer/borrower’s closing costs can be paid by the seller, up to 4% of the loan amount.
Flexible credit requirements: Veterans with lower credit scores may qualify for a much lower interest rate than would be obtainable on a conventional loan.
Loan amounts up to $417,000 (or $625,500 in Alaska & Hawaii). Note: the borrower must qualify for the loan amount based on the borrower’s income & liabilities.
A VA approved appraiser will appraise the property being purchased to ensure it is not being purchased for over market value.
On most new home purchases, a final inspection is performed and a one year warranty is required from the builder.
If interest rates go down, the Veteran borrower may be able to lower payments through a VA Streamline re-finance or an Interest Rate Reduction Refinance Loan (IRRRL) with little or no out of pocket costs.
A VA Loan can be used to re-finance an existing home loan (even if it is not a VA Loan).
The VA guarantees a portion of the loan reducing the lenders risk.
Safeguards against excessive lender fees.
Additional benefits for Veterans rated for Military disability or a surviving spouse of a Veteran who died in service.
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