Mortgage Basics
VA Loan Benefits
The VA loan program offers a range of exceptional benefits that make homeownership accessible and affordable for eligible veterans, active-duty service members, and certain surviving spouses. Backed by the U.S. Department of Veterans Affairs, these loans are designed to reward those who have served our country by reducing the barriers to purchasing or refinancing a home. Below, we explore the incredible benefits of VA loans and why they stand out from other mortgage options.
One of the most attractive features of a VA loan is the ability to finance 100% of the home’s purchase price. Unlike conventional and FHA loans, VA loans allow qualified borrowers to buy a home without needing a down payment, freeing up savings for other priorities like moving expenses or home improvements.
VA loans come with the flexibility to pay off your loan early without incurring any prepayment penalties. This allows borrowers to reduce the total interest paid over the life of the loan by making extra payments when it’s financially feasible.
VA loans offer competitive interest rates, often lower than those of conventional loans. These rates are made possible by the federal governments guarantee that protects lenders, enabling them to offer better terms to VA loan borrowers.
Compared to conventional loans, VA loans have more lenient qualification criteria. This includes more flexible credit score requirements and higher allowable debt-to-income ratios, making homeownership attainable for more veterans, active service members, and surviving spouses.
With a VA loan, sellers can contribute to the buyer’s closing costs, reducing out-of-pocket expenses. This unique benefit can make it easier for VA borrowers to cover the upfront costs associated with purchasing a home. Sellers can give up to 4% of the sales price as seller credits for closing costs or buying the rate down.
As of 2020, VA loans no longer impose loan limits for borrowers with full entitlement. This means eligible veterans can borrow as much as they qualify for without needing to worry about exceeding a set loan cap.
VA loan benefits aren’t a one-time deal. Borrowers who pay off their existing VA loan or sell their home can use their VA loan benefits again in the future to purchase another home.
VA borrowers have access to streamlined refinance options, such as the Interest Rate Reduction Refinance Loan (IRRRL), which allows them to secure a lower interest rate or switch to more favorable loan terms with minimal paperwork and costs.
A Path to Affordable Homeownership
VA loans offer a wealth of benefits that make them one of the most powerful tools for achieving affordable homeownership. From no down payment to no PMI, easier qualifications, and competitive rates, this program is tailored to serve those who have served our country. At Vision Home Mortgage, we’re here to guide you through every step of the VA loan process, ensuring you get the most out of these incredible benefits. Contact us today to start your journey toward homeownership.
