What Can a VA Loan be Used for?

If you find that you are in fact qualified for the VA loan program, it is a good idea to consider it as your first choice for mortgage financing. This is because you will likely find several benefits it offers compared to a standard conventional loan in the market today.

VA Loan Vs Conventional Loan

Consider this: with the VA financing you will be able to purchase a house up to the amount of $417,000 with absolutely no need for a down payment. Standard loans will normally charge you an average down payment of 5-20 percent.

There are a few that may require no down payment too, but the conditions are very strict, as the interest rate is higher, and the programs are usually credit score based.

However, qualification for the VA loan is not determined entirely by your credit score. It will also not make a difference whether you’re paying a 5 percent down payment or you don’t have any down payment at all; you will still be charged the same low rate.

How You Can Use A VA Loan

So what can a VA loan actually be used for? Here are a number of things where you might find it helpful:

  • To purchase a house, including a townhouse or condominium unit in a VA-approved project
  • To build a house
  • To buy a house and improve it at the same time
  • To make renovations by installing useful features like water heaters, weather-stripping/caulking, solar or heating/cooling systems, insulations, storm windows/doors, and other energy-related improvements.

    If you plan on implementing such renovations, you can actually have an additional $3,000 on your loan based on documented costs. Alternatively, the amount can reach up to $6,000 if the increase in mortgage payment is offset by the expected drop in utility costs.

    However, a refinancing loan may not go beyond 90 percent of the appraised value of the property combined with the costs of improvement. Consult a lender or the local VA office near your area for more information.

  • To refinance an ongoing VA loan in order to reduce the interest rate
  • To buy an already completed house and/or lot

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What Can a VA Loan be Used for? | veterans mortgage loans | VA refi | VA refinancing