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Benefits of the VA home loan

Whether you are still on active duty or had been on prior service, you are bound to find several benefits and advantages to making use of the VA home loan program. If you are eligible to apply for the said financing assistance, it is highly recommended that you consider it as your first choice for mortgage financing.

You will be surprised that application for the VA home loan is even easier than some standard financing programs in the market today. Apart from the relative convenience of applying for it, a VA home loan offers other benefits over a conventional financial assistance.

Benefits

Here are just some of them:

– You can purchase a house for an amount up to $417,000 without down payment. Standard loans, on the other hand, require you to have an average down payment of 5-20 percent. Although there are quite a number of conventional loans in the market that offer no down payment, their interest rate is much higher, and these programs are usually based on credit score. VA loans are not like that. Eligibility for a VA home loan is not determined largely by your credit score. Furthermore, you only need to pay the same low rate whether you have a 5 percent down payment or you don’t have any down payment at all.

– A VA home loan doesn’t require that you hold mortgage insurance. As opposed to many standard loans which actually require you to have mortgage insurance if you prefer to a down payment that is less than 20 percent, this is a pleasant relief.

– If your credit is less than satisfactory, you will still be more likely to have a lower rate with a VA home loan compared with a standard financing program.

– VA loans don’t require any prepayment. This spells out that you can actually put up your house for sale or refinance it without worrying about having to pay a penalty.

– A seller is allowed to pay all of his closing cost of up to 6 percent of the loan amount if he is using a VA home loan. With a standard loan, on the other hand, he can only pay a closing mount of up to 3 percent of the loan cost.