The military is a crucial and necessary part of the United States. Those who choose to serve the country often make many sacrifices. They leave families at home to travel overseas, sometimes putting themselves in danger. In return, the country attempts to show its gratitude with assistive programs for veterans. One of the most important veteran programs is that of VA mortgages. The VA mortgage is a different type of home mortgage. The goal is to provide veterans with an easier process of purchasing a home. The benefits of VA loan vs conventional offer the following.
Easier acceptance rates
After the recent housing crash, obtaining a mortgage loan is more difficult than it once way. Depending on the specific type of mortgage, you have to have a minimum credit score, certain percentage of a down payment, and proven income. Because veterans have unique employment situations, this sometimes makes it more difficult to obtain a traditional mortgage.
For example, veterans who choose not to reenlist after serving their term might not meet the minimum job requirements of a conventional mortgage. The veteran loan program looks at these unique situations. To qualify for a VA loan, one must have served 181 days during peacetime, 90 days during war time, or six years in the Reserves or National Guard. The spouse of a service member who was killed in the line of duty may also qualify.
Lower down payment required
Many conventional mortgages require up to 20% of the original loan amount. This can be troublesome for some home buyers to come up with. The loan requirements for a VA loan, however, tend to require much less. While conventional loans will rarely finance 100% of the loan, VA loans do not require mortgage insurance and allow for 100% financing. Essentially, the down payment cost is rolled into the loan, making it so the borrower does not have to come up with it before moving into their new house.
Lower closing costs
The closing costs on a home include taxes, insurance, realtor fees, and any banking points that are attached to the mortgage loan. These fees can quickly add up, requiring some to bring even more to the closing table. The loan requirements of a VA loan, however, also offer lower closing costs. One of the best benefits of VA loan closing costs is that in many cases, the bank is willing to either waive or roll those fees into the original loan. However, many bankers will entirely waive or reduce the points on the loan, also offering the borrower a reduced interest rate.
How to find VA loan lenders
With reduced loan requirements and VA mortgage assistance programs, more veterans are able to purchase their own home. In fact, the VA Home Loan has helped more than 22 million veterans achieve homeownership. If you are interested in using a VA loan to obtain a new house, you will have to work with a lender that offers this type of a mortgage loan. Although most lenders do have VA loan possibilities, not all offer this service. Work with a local lender on qualifying for your VA loan. A local real estate professional can also help with tracking down a qualified VA loan lender. They will gather all of your information and figure out what your exact loan requirements are.
Military members do a lot for our country. They give up their freedom, so we can bask in ours. As a type of gratitude, the country has developed special mortgage loans for those who have served. The requirements of the VA loan are less than a conventional mortgage, giving more veterans the ability to purchase a house. They usually receive looser loan requirements, reduced down payment, lower closing costs, and better interest rates.