The Veterans Administration of the United States of America, under the direction of the Department for Veterans Affairs, is the agency that awards benefits to veterans of the United States military. One of the best benefits available to military personnel, both active and retired, is the VA home loan.
100% Financing For Veterans
The VA home loan provides one hundred percent financing for certain members of the military, both past and present to purchase their home. You qualify for financing if you have been active in the military for 90 days during combat, or 180 days during peacetime for members of the Army, Navy, Air Force, and Marines.
Additionally, if you have served in the National Guard or Army reserve, you may qualify as well. If you are the surviving spouse of a military service person who has either died, is missing in action, or is a prisoner of war, you may qualify for a VA home loan under certain conditions.
Government Guaranteed Loans
The VA home loan is a government guaranteed loan. The government does not put up the funds to purchase your home, but it does guarantee repayment to the lender if you should default. This means that veteran borrowers can save hundreds each month because there will be no need to add mortgage insurance on top of the principle amount owed on your home because the loan bears the government guarantee of repayment.
Many Advantages Yield Huge Savings For Veterans
1) Among the many advantages of obtaining a VA home loan as opposed to traditional funding is that there usually is no down payment required. The VA will most often require no out of pocket expenses whatsoever when approving a veteran for a home purchase. The seller is allowed to pay the closing costs for you on your VA home loan, which makes buying the home you need easier and more affordable.
2) Because the lender assumes a minimal amount of risk when writing VA home loans, the interest rate that you will be charged is nominal. In terms of interest, veterans save thousands of dollars over the life of their VA home loan by going with the VA as opposed to traditional funding sources. Furthermore, buyers with most credit types can be approved for VA home loans, because the Veterans Administration only looks at your past twelve months credit performance.
3) There is no prepayment penalty for VA homeowners who wish to pay out early, usually by selling their home. Your VA guaranteed home loan is also assumable, which means that if you do decide to sell your home, the buyer can assume your mortgage, which can be a big selling point with the low interest that you mortgage will carry.
4) You can choose your loan type when you take out a VA home loan, either fixed or adjustable rate. Many borrowers of VA home loans prefer the predictability of a fixed rate payment, while others go for adjustable rate mortgages because of the ultra low interest that is charged for the first few years. The VA leaves that choice up to you.