Benefits Of The VA Home Loan - Take Advantage

If you are an eligible veteran or active duty military person in the market for a home loan then you should strongly consider the VA loan program as your 1st choice for mortgage financing. A VA loan offers numerous benefits over a conventional loan. Consider the following:

• Buy a home for up to $417,000 with no down-payment. Conventional loans require an average down-payment of 5% -20%. Although there are some $0 down-payment conventional loan programs available, the interest rate on these conventional programs is higher and the programs are credit score based. This is not the case with VA loans. Eligibility for a VA loan is not based on your credit score and you pay the same low rate whether you are making a 5% down-payment or no down-payment at all.
• VA loans do not require you to have mortgage insurance. Compare this to conforming conventional loans which do require you to have mortgage insurance if you are making less than a 20% down-payment.
• If you have less than perfect credit you are likely to get a lower rate with a VA loan than with a conventional loan.
• VA loans are assumable.
• There is no prepayment penalty on VA loans which means you can refinance or sell your home at any time without having to pay a penalty.
• VA loans allow you to have a higher debt ratio than conventional loans. Your debt ratio is a crucial factor in the loan qualification decision. It will be easier to qualify for a VA loan if you have a debt ratio over 36%.
• With a VA loan the seller is allowed to pay all of your closing cost up to 6% of the loan amount. A conventional loan only allows the seller to pay your closing cost up to 3% of the loan amount.