VA Home Loan Benefits

If you need a home loan, you might consider a VA Loan.

Department of Veterans Affairs home loans — VA loans for short — are a popular option with home buyers.  The loans require no down payment and are available from most lenders. In addition, the government limits the amount of closing costs and origination fees lenders can charge, as well as the appraisal fees. In general, the loans are available to some veterans, active service members, reservists and members of the Public Health Service.

Another important fact to know is that a VA loan is not a loan through the Veterans Administration, but a loan through a traditional lender that is backed by the VA. Having the backing of the government, veterans do not have to jump through as many hoops to get a mortgage.

Rates generally follow the market, just like any other home loan. Rates are generally in line with conventional rates. The advantage of going VA is that you do not have to make a down payment. According to VA statistics, 91 percent of VA buyers skip the down payment. While buying would not make sense in most scenarios when no down payment is available, veterans can forgo years of renting for years of equity.

Unlike conventional loans that permit this practice of putting no money down, the VA forbids lenders to bother their clients with any PMI payments, which is a form of insurance for owners who do not hold 20% equity in their home.

On a $126,000 mortgage will have a PMI range of up to $64 a month that may require five years to pay off. The result is almost $4,000 spent that did not go into the equity of the home, or for anything else that is to the benefit of the owners.

Most home buyers can think of many ways to utilize $4,000 to their advantage. The VA home loan keeps that money in your pockets.

I hope that this has helped you identify all of the advantages that a VA Loan offers you. Please be sure that you take advantage of the great rates that are available to you right now.

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*Annual savings calculator based on 2015 monthly average savings extrapolated year-to-date.