Following their service, American veterans may find themselves in search of new residence. Fortunately, there are programs in place to help veterans secure funding and financial support. VA home loans are backed by the U.S. Department of Veteran Affairs, and they offer a number of benefits to veterans and active-duty service members to ensure these select groups can obtain adequate housing at a reasonable cost.
Often cited as the most valuable benefit, VA loans rarely require a down payment. This means that loan-seekers will not be expected to produce any money upfront, which is especially helpful for veterans who are unemployed or still transitioning to civilian life. Other loans typically require anywhere from 3.5% to 5% of the loan’s value upfront, making VA loans a more attractive and forgiving option.
Unlike other loans, VA loans do not require home buyers to purchase mortgage insurance, saving them money in the long run. Mortgage insurance can weigh heavily on an individual’s finances with hefty upfront and monthly charges, and it is often required when loans are procured unless the buyer makes a down payment that is equal to or higher than 20 percent.
VA loans are notably more flexible than other loans. Though VA loans do require a funding fee, nothing is due at closing, and the VA is often willing to be flexible in how buyers pay this fee. Additionally, in qualifying for a VA loan, buyers will often have a better chance of qualifying for such a loan due to the VA’s credit flexibility.
Compared to all other loans, VA loans have a much lower interest rate on average. This makes VA loans easier to pay off in a shorter amount of time.
The VA has staff members who can provide assistance, advice, and general guidance on owning a home, especially when it comes to difficult financial decisions. One of these areas deals with foreclosure; rather than simply deciding to foreclose a property, those who qualify for a VA loan will be able to use a representative of the loan program to advocate for them and find an alternative to foreclosure.
There are two ways to refinance loans and lower monthly mortgage costs with a VA loan. By getting new interest rates on existing VA loans or transferring a loan from a lender outside of the VA, individuals can lower how much they must pay toward their loans each month.