There are over 20 million Veterans and Service Members living in the U.S. today, but less than 10% of them bought a home using a VA home loan in the past 10 years. They may not know the advantages, they might think the process is a hassle, or they simply might not know much about it. Here are 5 things most Veterans Don’t Know about VA home loans.
5 Things Most Veterans Don’t Know About VA Home Loans
No down payment, no mortgage insurance
Perhaps one of the top things most veterans don’t know about VA home loans is that as a Veteran or Service Member you do not pay a down payment. Most mortgage programs such as FHA and conventional loan programs require at least 3.5 percent of the purchase price in the form of a down payment. As a real life example, that’s $12,500 on a $250,000 home purchase. By skipping the down payment, you’re able to skip the years of saving for a down payment that many home buyers have to go through to buy a home. Additionally, with a VA home loan, you are able to avoid mortgage insurance. This allows you to save hundreds of dollars a month in private mortgage insurance which may help a higher priced home fall into your loan limits.
Use your benefit more than once
With a VA home loan, you’re able to use your benefits over and over again, it’s not a one-and-done program. When you find yourself looking to move out of the home you originally purchased with a VA loan, your entitlement gets restored in full. Additionally, eligible Veterans can receive a one-time restoration when they pay off the VA loan but keep the home. This also comes into play when you refinance a VA mortgage with a non-VA loan.
Surviving spouses may be eligible
Un-remarried husbands and wives of Service Members who were killed in action can buy a home with no down payment and no mortgage insurance. On top of that, the funding fee is waived. There is no way to repay the spouse of a fallen service member, but this benefit helps them move forward afterwards.
Lower interest rates
One of the top things most Veterans don’t know about VA home loans is the interest rates are typically 0.25% lower than conventional interest rates. Simply being a quarter point lower can save you thousands of dollars over the years in just interest rate.
Multiple home options with VA loans
With a VA home loan, you’re able to buy many types of properties including single family, home of up to four units, manufactured homes, and even condominiums. Condos are typically starter homes and their price point is often times lower than a single family home. Having the freedom to choose the type of home you want to live in remains a strong reasons to choose a VA home loan.
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