The questions you have as a first time VA home buyer may differ than if you were a first time home buyer for another loan type. First time VA home buyers will probably have questions about the mortgage program and why so many people use it to buy a home.
Questions Most First Time VA Home Buyers Have
Why should I use a VA loan?
Generally speaking, if you can qualify for a VA home loan, it is a mortgage product you should strongly consider using. One of the biggest benefits is that VA loans come with the lowest mortgage rates of any type of mortgage. You also won’t be required to make a down payment, and some closing costs can be forgiven. Additionally, you’re able to use your VA loan again and again based on entitlement.
Why don’t I need to make a down payment?
Now you may be wondering why you don’t need to make a down payment. The VA home loan is backed by the VA which includes their guarantee, meaning they assume a lot of responsibility that would typically fall onto the home buyer. The purpose of a down payment is to protect the lender in case the home buyer can’t afford their home later down the road. With the VA home loan, the VA guarantees the buyer, so you don’t have that responsibility. It is important to note that even though a down payment is not necessary for the VA home loan, a lot of VA home buyers opt to put some amount of money down if they are able to lower the cost of their VA loan.
What about mortgage insurance?
With the FHA loan, if you opt to put the minimum 3.5% down, you are also signing up for mortgage insurance. So it’s a common thought for first time VA home buyers that if a down payment isn’t required with a VA home loan, then mortgage insurance is. VA home buyers don’t have to worry about this. The VA’s guarantee extends to insurance as well, protecting the lender while making your home more affordable for you.
How long does the VA loan process take?
A common fear for first time VA home buyers is that VA home loans take a long time to close. Either with complications or issues with the appraisal. On average, VA home loans take an average of one to two days longer than other loans, which in the grand scheme of things isn’t that different. Closing time varies from buyer to buyer though, so the best way to get an idea of how long the closing process will take, talk to your lender about your concerns.
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